Skip to main content

Full text of "Report of the technical agent of the Council on his mission in China from the date of his appointment until April 1st, 1934."





0.3G 
253 7 



LEAGUE OF NATIONS 



COUNCIL COMMITTEE ON TECHNICAL CO-OPERATION 
BETWEEN THE LEAGUE OF NATIONS AND CHINA 



REPORT OF THE TECHNICAL A6ERT OF THE COUNCIL 

on his mission in china 

from the date of his appointment until April 1st, 1934 



OENEVA 1934 



[Communicated to the Council and 
the Members of the League.] 



Official No. : C. 157. M. 66. 1934- 



Geneva, April 30th, 1934. 



LEAGUE OF NATIONS 



COUNCIL COMMITTEE ON TECHNICAL CO-OPERATION 
BETWEEN THE LEAGUE OF NATIONS AND CHINA 



REPORT OF THE TECHNICAL AGENT OF THE COUNCIL 

on his mission in china 

from the date of his appointment until April 1st, 1934 



Series of League of Nations Publications 

GENERAL 
1934. 1. 



— 3 



CONTENTS 



Page 

List of Documents mentioned in the Report 4 

Introduction 5 

Chapter I. — History of the National Economic Council 11 

Chapter II. — Agriculture 16 

Chapter III. — Cotton 31 

Chapter IV. — Silk 33 

Chapter V. — Water Conservancy 37 

Chapter VI. — Roads 41 

Chapter VII. — Health 57 

Chapter VIII. — Education 59 

Chapter IX. — Recapitulation of Chapters II to VIII 61 

Chapter X. — Reconstructive Activity of the Government as outlined 

by M. Wang Ching Wei 64 

Chapter XI. — Conclusions : Methods proposed for Technical Collaboration 

through the League 68 



S. d. N. 1.915 (F.). 1.835 (A.). 5/34- Imp. J. de G. 



— 4 



LIST OF DOCUMENTS MENTIONED IN THE REPORT. * 



i. Report of the National Economic Council, October 1933. 

2. Regulations governing the Organisation of the National Economic Council and 
of its Bureaux, Committees and Offices, 1934. 

3. Project of the National Economic Council for 1934 and Allocation of Funds. 

4 . Report of a Survey of Certain Localities in Kiangsi, published by the National 
Economic Council, January 1934. 

5. Report on the Economic and Financial Situation of Chekiang Province, 1934- 

6. Agricultural Reform and Development in China, by Professor C. Dragoni, 
published by the National Economic Council, 1933. 

7. Summary Report on an Enquiry on the Re-organisation of Chinese Sericiculture, 
by Signor Benito Mari, published by the National Economic Council, October 
1933- 

8. Report of the National Health Administration on the Three- Year Plan, 1931- 
1934- 

9. Memorandum presented by the Ministry of Education to the Fourth Plenary 
Session of the National Economic Council, March 26th, 1934, following a Visit 
by M. Maurette. 

10. List of Major Enquiries at present being conducted on Agricultural and Industrial 
Topics, compiled by Dr. D. K. Lieu. 



1 These documents, which contain supplementary information, are issued by the National 
Economic Council. 



5 — 



INTRODUCTION. 



i. The Chinese Government presented, on June 28th, 1933, a communication 
to the Council of the League in regard to technical collaboration in the work of national 
reconstruction. This communication reads as follows : 

" The Council will recall that, at its session in May 1931, it has considered 
a telegram from the National Government of China dated April 25th, 1931, by 
which my Government indicated its decision to form a National Economic 
Council with the object of elaborating plans for national reconstruction and in 
which the collaboration of the technical organisations of the League was 
requested in the work of this Council. 

' The National Government at the same time outlined the principal measures 
which might be taken in order to give effect to such collaboration — namely : 

'" 1. First, in the stage of first planning and organisation, the League 
might be able to send someone, as it has already done in the special domain 
of health work, for such limited period as might be practicable and convenient 
to the Government in order to help with his advice both as to the plan itself 
and as to any subsequent methods by which the League could assist it. 

'"2. Secondly, in the execution of particular projects, the League 
might, at the request of the Government, send or propose officers, repre- 
sentatives or experts who, apart from their own competence, could be in 
contact with the relevant technical organisation in Geneva. 

'"3. Thirdly, in appropriate special cases, a League Committee, 
whether a standing committee or one appointed ad hoc, might, at the request 
of the Government, help to frame or improve some particular scheme. 

'"4. Fourthly, the League might, in several ways, help in the training 
of China's own officers who will be required for the more extended work of 
later years. In the domain of health, the League has already been able to 
arrange for technical education in practical work in other countries, some- 
times with the aid of Fellowships. 

'"5. In addition, the League might help the Government to find 
advisers to assist the development of the Chinese educational system and 
facilitate the intercourse between the centres of intellectual activity in 
China and abroad.' 



" At its meeting on May 19th, 1931, the Council adopted these proposals of 
my Government and, at the same time, approved the suggestions of the Secretary- 
General regarding the methods of carrying out this collaboration. The Council 



— 6 — 

decided in particular, in regard to the first point of my Government's proposals, 

that : 

' ' ' The officer whose services are requested for such limited period as 
might be practicable and as might be convenient to the Government should 
be competent to give information on the working of the League's technical 
organisations and the manner in which they might be utilised by the Chinese 
Government. For this purpose, the Secretary-General considers that one of 
the Directors of the technical organisations should be authorised to pay 
a further visit to China . . .' 

" and in regard to points (2), (3) and (4), the following : 

"' Proposals for collaboration would be transmitted by the Secretary- 
General to the competent technical organisations for action, subject to 
the approval of the Council as required by the rules of procedure.' 

" During the two years that have elapsed since this Council decision, my 
Government has had the advantage of the collaboration of a certain number 
of experts from the League's technical organisations, whose work has been greatly 
appreciated. The Secretary-General has also been good enough at our request 
to recommend candidates for appointment to high posts in the Government 
service, and, finally, the Government has been able to rely on the assistance as 
' liaison ' agents of the League's technical organisations of two principal officers 
of the Secretariat who have rendered eminent services in this capacity during 
the few months of their activities in China, for which the Government desires 
to take this opportunity of thanking the Secretary-General and the Council. 

" I have the honour to inform the Council that, the preliminary work of 
survey having been made, the National Government, in view of the resources 
at its disposal, has decided as a beginning to carry into practice its national 
reconstruction work in a few provinces which will serve as models for the rest 
of the country. 

" It is clear that this work demands continued effort on the part of all who 
take part in it, as well as constant co-ordination of all the activities involved. 
The National Government would highly value measures which the Council 
might take in the present circumstances in order to ensure this continuous 
collaboration from the League with the National Government in its work of 
reconstruction, and, in particular, by the nomination for this purpose of a 
technical officer to be accredited to the National Government and its National 
Economic Council. 

" I should therefore be very grateful if the Council could presently examine 
the question which I have the honour to place before it on behalf of my 
Government, in order that its decision may be acted upon with as little delay as 
possible." 



2. At its meeting of June 30th, 1933, the Council decided to appoint a special 
committee to examine the action to be taken on the above communication of the 
Chinese Government. The Committee met in Paris on July 18th, 1933, and the 
resolution which it adopted was subsequently approved by the Council. The resolution 
stated : 

" The appointment of the technical agent requested by the Chinese Govern- 
ment is of a purely technical and entirely non-political character. In view of this 
fundamental principle, it is understood that the technical agent shall act as a 
technical liaison officer with the National Economic Council of China for the 



— 7 — 

purpose of technical co-operation with the competent organs of the League of 
Nations. 

" He shall hold office for one year. His salary and his travelling and subsis- 
tence expenses shall be defrayed by the Chinese Government. 

' ' The duties of the technical agent shall be : 

" (i) To supply information on the working of the technical organi- 
sations of the League and on the manner in which these organisations may 
be utilised for the purpose of co-operation in the reconstruction of China ; 

" (2) To transmit to the Secretary-General of the League of Nations, 
for submission to the competent organisation or organisations, any 
request for technical co-operation which he may receive from the Chinese 
Government ; 

'* (3) To afford the Chinese Government such assistance as it may 
desire with a view to securing the co-operation of such experts as that 
Government might wish to engage for a technical service connected with the 
work of reconstruction, and, 

" (4) To assist the National Economic Council in co-ordinating on 
the spot the activities of the experts of the League's technical organisations. 

" The technical agent shall forward to the Council frequent statements 
regarding his work and a detailed report at least once every three months. 
This report shall also be communicated by the Secretary-General to such technical 
organisations of the League as have been called upon to co-operate at the Chinese 
Government's request. 

" The technical agent shall apply to the Secretary-General of the League 
with a view to securing the assistance of the technical sections and organisations 
in any enquiries he may have to carry out in the discharge of his duties as defined 
above. 

"It is understood that whenever the technical agent forwards statements 
and reports on his work to the League, copies thereof shall be sent at the same time 
to the National Economic Council of China. 

' ' The Committee of the Council appoints Dr. Rajchman, Director of the 
Health Section of the Secretariat, to act as technical delegate with the duties 
defined above. 

; ' In notifying the Council of its decisions, the Committee of the Council 
desires to state that it will in future remain at the Council's disposal for the 
purpose of : 

" (1) Considering any questions relating to the League's technical 

co-operation in the reconstruction of China that may be laid before the 

Council by the Chinese Government ; 

' ' (2) Examining the statements and reports received from the technical 

agent and discussing all questions relating to the discharge of his duties 

which the Committee may deem it desirable to consider." 

3. In execution of the mandate entrusted to me, and in conformity with the 
arrangement concluded with the Chinese Government, I arrived in China on October 
3rd, 1933- 

4. On October 4th, the Chinese National Government installed in office the 
Standing Committee of the National Economic Council, composed of the Prime 
Minister, M. Wang Ching-Wei; the President of the Legislative Yuan, Dr. Sun Fo; 
and the Minister of Finance, Dr. T. V. Soong ; and, on the same day, defined the extent 
of the powers of this Committee. 



— 8 — 

5. Following the resignation of Dr. T. V. Soong as Minister of Finance, the 
Standing Committee on December 8th, 1933, was enlarged from three to five members 
by the addition of the new Minister of Finance, Dr. H. H. Kung, and the Chairman 
of the Military Affairs Commission, General Chiang Kai-shek. 

6. The Standing Committee proceeded to a detailed study of the activities to 
be undertaken and financed during the year 1934, in addition to the work begun in 
1931, which continued and developed without interruption. 

7. On the completion of the preliminary study, a programme of collaboration 
with the League technical organisations was discussed with me, and I communicated 
it to the Secretary-General on December 30th, 1933. 

In this communication, before outlining the proposals of the National Economic 
Council, I suggested that it should be a general principle to select as few technical 
experts as possible for service in China, and that these should either have had extensive 
experience in work in many countries or else should be prepared to remain for a 
considerable time in China, in order to become acquainted with local conditions. 
I indicated at the same time that the collaboration of the Health, Transit and 
Economic Organisations of the League with the Chinese Government was being 
prolonged in 1934, and that the two officers who were advising on the reconstruction 
of the Civil Service were continuing their studies. 

The main proposals of the National Economic Council for 1934 were 
for improvement in communications, for water conservancy schemes and for the 
comprehensive reconstruction of certain rural areas. 

It was felt that the programme of road construction had reached a point where 
consultation with engineers who had had experience in countries with conditions 
similar to those of China would be of undoubted value, particularly on the following 
problems : 

I. The best type of roads adapted to selected areas ; 

II. The methods of operating roads ; 

III. The available local fuel supplies ; 

IV. The most suitable types of vehicles and engines. 

The Communications and Transit Organisation was therefore requested to 
make suitable arrangements for expert consultation in China. As regards water 
conservancy, the services of an experienced hydraulic engineer, particularly with 
considerable international experience, were requested in order to advise upon the 
general conduct of water conservancy policy. 

I made the suggestion that the consultation asked for should be limited to not 
more than three outstanding specialists, who should be accompanied by the Director 
of the Communications and Transit Organisation when in China. 

The Ministry of Education requested the League to send an authority on educa- 
tion to discuss the practical application of the proposals made by the Education 
Commission despatched to China two years ago by the Institute of Intellectual 
Co-operation, and of the Chinese group which paid a return visit to Europe in 1932. 
The Ministry desired the League, in making its selection, to choose a person who 
would be prepared to act as a permanent liaison officer in Europe between China 
and the Institute of Intellectual Co-operation. The duties of this officer would be to 
prepare technical studies for Chinese educational authorities visiting Europe ; to 



— 9 — 

seek out experts, at the request of the Chinese Government, for advising on particular 
educational reforms in China, and, in particular, to guide the studies of Chinese 
students abroad. The Council suggested that someone should be selected who had had 
experience in adapting educational policy to a general comprehensive policy of 
industrial reconstruction. 

The National Economic Council attached great value to the agricultural survey 

, made by Professor Dragoni in the winter of 1932-33, and was anxious that he should 

pay an early visit. If Professor Dragoni was unable to accept such an invitation, 
the Council asked for a list of names to be submitted of authorities who had had 
experience of the application of land reform in rural countries in Europe since the 
war, from whom it might select another outstanding specialist. It was requested 
that on the list there should also be included persons who had had experience in the 
activities and methods of economic councils in other countries, especially in Europe, 
the United States of America and the Union of Soviet Socialist Republics. 

An enquiry was made as to whether Professor Parejas, who had spent two years 
at the Central University of Nanking on the nomination of the League, could place 
his services at the disposal of the National Geological Survey. 

Finally, I reported that M. Mari, who had been placed by the Economic Committee 
of the League, in response to a request by the Chinese Government, at their disposal 

f since 1932 for the improvement of sericiculture, had joined, from January ist, 1934, 

the foreign staff of the National Economic Council and that the nomination of a 
sericiculturist with French experience was requested for a like service, it being under- 
stood that, in both cases, the League would bear a small part of the salaries. 

8. As the consideration of plans of application was still in progress when the 
Council Committee on Technical Co-operation between the League of Nations and 
China met on January 10th, 1934, I asked leave of the Council to present a considered 
report at a later date, and had the honour to submit a preliminary statement on 
progress on January 4th, 1934. This communication stated : 

' ' The Council's decision to strengthen technical collaboration with China 
was welcomed by all Government leaders and caused general satisfaction in 
the several important centres of the country. The Standing Committee of the 
National Economic Council is now composed of the Prime Minister, the 
Commander-in-Chief, the Finance Minister and the President of the Legislative 
Yuan, with Mr. T. V. Soong as its leading member. The National Economic 
Council is receiving co-operation from responsible quarters in expectation 
of tangible results of its work. It is expected that arrangements will be made 
soon by which the work of the National Economic Council will be financed 
by proceeds of the American cotton and wheat loans. Plans for new reconstruction 
work are still under study, and meanwhile standing activities continue in the 
fields of road construction, hydraulic works, rural reconstruction, education and 
public health. Proposals of collaboration in the above fields with the League 
of Nations have been forwarded by me, together with relevant comments, to the 
Secretary-General for consideration by the competent technical organisations 
and sections of the Secretariat. I beg to request, however, that the Council 
allow me to present a considered report at a later date when, on the one hand, 
conclusions are available of the economic survey being carried out at present 
on behalf of the National Economic Council by foreign experts and Chinese 
technical officers, and, on the other hand, when a concrete plan has been effectively 
adopted by the National Government. Meanwhile communications will be, 
as in the past, regularly made to the technical organisations with regard to the 
several fields of continuous activity, the progress of which will be periodically 
reported to the Secretary-General. " 



— 10 — 

9. While the technical secretariat of the National Economic Council continued 
to carry out its work in the fields of health, road-building and, in part, of water 
conservancy as heretofore, local surveys, studies and investigations in relation to the 
new programme were being conducted by the Chinese and foreign members and 
visiting specialists. MM. Briand-Clausen and Stampar were closely associated 
with this work, as will be shown in detail on the following pages. 

10. The programme for 1934 was finally adopted by the National Government 
and accepted by the plenary session of the National Economic Council on March 
26th, 1934. 

11. In the intervening period, the Secretary of the Council Committee and I 
were exchanging frequent communications regarding details of the collaboration 
of the technical organisations of the League in regard to the several fields of continuous 
activity and the arrangements for 1934. 






— II 



Chapter 



HISTORY OF THE NATIONAL ECONOMIC COUNCIL. 



i. The decision to set up a National Economic Council was taken by the 
National Government of the Republic of China in May 1931. At that time, several 
months had elapsed since the end of major civil war, the flag of the National 
Government was flying in Central, Northern, and South-Western China, as well as 
in the four North-Eastern Provinces. The effects of the world economic crisis were not 
yet being felt in the country, and a period of peaceful development was generally 
expected. The early action on the decision of the League Council in regard to technical 
collaboration was requested from Nanking. The Educational Survey Group sent 
by the Committee on Intellectual Co-operation was on its way, and other technical 
agents were expected, when a flood of unprecedented magnitude occurred in the 
Yangtse Valley, 1 and the League, at the request of the Government, nominated one 
of its most experienced field workers, who was appointed on arrival to act as Director- 
General of the National Flood Relief Commission. a 

At the same time, in the autumn of 1931, the economic crisis had become more 
acute in the chief industrial countries in the West, as was strikingly illustrated by 
the abandonment of the gold standard by the United Kingdom. 

On September 18th, 1931, the Japanese forces opened hostilities in Mukden, 
and the attention of the Government was suddenly diverted from the emergency 
work in the Yangtse Valley and the task of organising central machinery for economic 
development, which was about to be begun. 

t 

2. Notwithstanding this situation, the National Economic Council was inaugu- 
rated on November 15th, 1931, in plenary session, and the then Chairman of the 
National Government, General Chiang Kai-shek, thus described the purpose of the 
Council in the inaugural address which he delivered as Chairman of the Council : 

' ' The constitution of the National Economic Council clearly shows that it 
was the desire of the National Government to create an Advisory Council in 
which the principal Ministers of the Government have associated with them 
private persons from outside, selected, not because of the position they hold, 
but because of their personal qualities and abilities, from amongst the leaders 
in the various forms of activities they perform. They are invited to help the 
Government in planning and executing an urgent development programme. The 
Council as a whole is thus an advisory board ; but, as far as the Ministerial 
members of the Council accept policies proposed, they will be, as members of the 



1 See quotation from the National Flood Relief Commission report in Chapter IV. 
* Sir John Hope Simpson, formerly of the Indian Civil Service. 



— 12 — 

Government, in a position to give immediate executive effect to them. The 
archives of all the Ministries abound in schemes and proposals of all kinds. It 
will be the first task of the National Economic Council to translate into definite 
projects such of the schemes as will be selected as being the most urgent, to 
correlate them with one another, to establish an order of priority, and, in essence, 
to elaborate as rapidly as possible a co-ordinated plan of development for a 
first period of three years beginning in 1932 ... In this respect, the Council 
will have the most responsible duties to perform. Article III of the Rules govern- 
ing its organisation provides explicitly that ' all State projects for economic 
reconstruction or development for which the requisite funds are either borne 
or subsidised by the National Treasury must be first investigated and considered 
by the National Economic Council before submission to the National Government 
for approval '. " 

3. The hopes of an early systematic development of the National Economic 
Council's activities were disappointed when the extension of the hostilities in the 
North-Eastern Provinces and the continuation of the flood compelled the Government 
to devote its attention and resources elsewhere. Early in 1932, the capital had to be 
transferred to Loyang, far in the interior, and all but the most necessary work of 
government had to be suspended. The exceptional circumstances and the resulting 
violent dislocation of trade and the fall in revenue imposed a severe burden upon 
national finances ; and, in addition, the country began, in 1932, to experience the full 
force of the world depression, from which, for a variety of reasons, it had until then 
been protected. 

Nevertheless, the National Economic Council made a beginning with its recon- 
structive activities, which in certain respects were in continuation of the work of the 
National Flood Relief Commission — in particular, in the field of water conservancy. 
Dykes were strengthened on the Yangtse and Yellow Rivers and on three of the most 
troublesome rivers in Central China — the Han, Kan, and Hwai. Assistance was also 
given to conservancy work along the seashore of Northern Kiangsu. 

In the field of road development and communications, the Council carried 
through two schemes for road building : the first in Kiangsu, Chekiang and Anhwei, 
provinces at the eastern end of the Yangtse Valley and under the immediate control 
of the Central Government ; and the second, by the extension of the programme 
of the first to the four other provinces of the Yangtse Valley — Hupeh, Kiangsi, 
Hunan and Honan. The schemes were based on grants of advances to the provincial 
Governments of about 40 per cent of the cost of construction of selected roads, out 
of a Road Development Fund under the auspices of the Council. This policy, continued 
in 1933, resulted in some 13,000 kilometres of highway being completed by the end 
of the year. 

The Council had taken over and adopted as its own the Three-Year Plan for the 
development of the health services, conceived as an instrument of rural reconstruction ; 
and, in particular, the comprehensive scheme of establishing central guiding technical 
institutions in Nanking and of organising areas of field application was completed 
under its auspices. A central hospital and central field health station were established, 
and have not only undertaken the guidance of medical and public health activities, 
but also, in response to increasing requests from provincial and municipal Govern- 
ments, have engaged in co-ordinating local health work. 

The Council made surveys of the general situation of agriculture, special detailed 
studies of sericiculture and of social conditions in certain provinces. 

In the field of education, it assisted the National Ministry of Education in a 
number of comprehensive studies at home and abroad. 



— 13 — 

4. The work of the first two years continued in the atmosphere of the deepening 
economic depression and uncertainty caused by severe fighting with the Japanese 
troops, in isolated parts of the country, at first in the centre and then again in the 
north of China, and with the communist insurgents in South- West Central China. 
During this period, the League technical organisations continued their active 
co-operation. 

Dr. B. Borcic, Director of the School of Hygiene at Zagreb, who had been acting 
since July 1930 as representative of the League's Health Organisation, was associated 
with the medical and sanitary emergency work necessitated by these various 
calamities. 

In October 1931, there arrived a Commission of educational authorities, consisting 
of the late Dr. Carl Becker, formerly Prussian Minister of Education ; M. P. Langevin, 
Professor at the College de France ; M. M. Falski, formerly director of the Polish 
Ministry of Education ; and Mr. R. H. Tawney, of London University. This Commis- 
sion was despatched by the International Institute of Intellectual Co-operation, 
and was accompanied by M. Bonnet, Director of the Institute, and Mr. Walters, 
representing the Secretary-General of the League. The Commission studied the 
educational system in China, and in its report, which was presented in July 1932, 
it made certain proposals for changes. 

At the beginning of November 1931, Dr. Ciuca and Dr. T. F. Huang, 
members of the Health Section of the League Secretariat, were sent for periods of 
three and six months respectively for urgent preventive and medical work in connec- 
tion with flood relief. Dr. Ciuca made, in particular, a survey of the malaria situation 
in the Yangste Valley, and Dr. Huang was in charge of medical relief at Hankow. 
Late in November, Dr. A. Stampar, Member of the League's Health Committee, 
joined them in anti-epidemic work for a period of several months. 

At the beginning of December, at the request of the Minister of Public Instruction 
and with the financial support of the League of Nations, three Professors — M. Parejas, 
Professor of Geology at the University of Geneva ; Dr. Wissmann, of the University 
of Vienna ; and Mr. Davy, Reader in English Literature at Nottingham University — 
were placed at the disposal of the National Central University of Nanking for the 
academic years 1931-32 and 1932-33. 

In January 1932, two engineers representing the organisation for Communications 
and Transit of the League — M. Okecki, Ministerial Adviser to the Ministry of Public 
Works at Warsaw, and M. Bourdrez, a specialist on hydraulic questions — were 
placed at the disposal of, and have since been closely collaborating with, the technical 
bureaux of the National Economic Council. 

In the same month of January 1932, in fulfilment of a request made by the 
Chinese Government to the Communications and Transit Organisation of the League, 
a Commission of three hydraulic engineers, consisting of Mr. Coode, a member of the 
London Institute of Civil Engineers ; M. Perrier, Inspector-General of Roads and 
Bridges, Paris ; and Herr Sieveking, Director at the Hamburg Port Administration, 
arrived to study certain problems connected with the Hwai River, the port of Shanghai, 
and the rivers of North China. Their recommendations are described in the chapter 
on the water conservancy work of the National Economic Council. 

In October 1932, Professor Carlo Dragoni, formerly Secretary-General of the 
International Institute of Agriculture at Rome, undertook, in response to a request 
of the Chinese Government and at the nomination of the Economic Committee of 
the League, a six months' study of the conditions of Chinese agriculture, and presented, 
in 1933, a report on the subject to the National Economic Council, 



— 14 — 

In the same month, M. Benito Mari, former Chairman of the Italian Association 
of Sericiculture, was nominated by the Economic Committee of the League, at the 
request of the Chinese Government, to make a study of sericiculture in China, and to 
examine the possibilities of its rehabilitation, and has been collaborating with the 
National Economic Council in this capacity until December 1933, when he joined the 
staff of the Council. 

From March 1933, M. Charron, of the Economic and Financial Section of the 
League of Nations, at the request of the Chairman of the National Economic Council, 
spent six weeks in China discussing problems connected with the preparatory work 
for the Monetary and Economic Conference and in response to the request to 
co-ordinate the activities in China of the various League specialists. 

In May 1933, Dr. Muehlens, of the Hamburg Institute of Tropical Diseases, a 
member of the League's Malaria Commission, undertook an enquiry on the frequency 
of malaria and made recommendations as to the prophylactic measures to be taken. 

Later in the year, Dr. Stampar, formerly Director of Public Health at the Ministry 
of Social Assistance and Public Health, Belgrade, was despatched by the Health 
Section, and M. Briand-Clausen, Secretary of the Danish Agricultural Council, by 
the Economic and Financial Section, in response to the new plan of collaboration 
inaugurated by the Council Committee's decision of July 18th, 1933. 

In addition, the Directors of the Health and of the Communications and Transit 
Sections of the League Secretariat acted as technical liaison officers from September 
10th to December 26th, 1931, and from January to August 1932 respectively. 

5. In the spring of 1933, the convocation of the Monetary and Economic 
Conference in London aroused hopes of an early concerted effort to devise international 
agreement and consequent action likely to contribute towards an early solution of 
the world economic and financial crisis. The Chinese Government responded in 
April to the invitation of the President of the United States of America by commis- 
sioning Dr. T. V. Soong, Vice-President of the Executive Yuan (then Minister of 
Finance), acting chairman of the National Economic Council, to consult with the 
United States Government and to lead the Chinese delegation at the London 
Conference. The financial arrangemnts entered into in May 1933, between the Chinese 
Government and the Reconstruction Finance Corporation of the United States, 
inaugurated a series of consultations with delegations to the Monetary and Economic 
Conference and leaders of industrial countries, with a view to studying the prospects 
of co-operation in the field of economic development. At the same time, the 
Chinese Government entered into an agreement with the Council of the League for 
technical collaboration on the terms and conditions stated above. 

6. The National Economic Council was to be the agent of the Government in 
carrying out the contemplated activity, and the membership of its Standing Committee 
was accordingly entrusted to the Prime Minister, the Chairman of the Military 
Commission, the Minister of Finance, the President of the Legislative Yuan and Dr. 
T. V. Soong. The National Economic Council itself consists of the Minister of the 
Interior, the Minister of Finance, the Minister of Railways, the Minister of Commu- 
nications, the Minister of Industries, the Minister of Education, and of unofficial 
members designated by the Government so as to ensure the participation of intellectual, 
industrial, and other circles. 

The powers of the Council are : 

(1) To plan, examine and approve projects for economic reconstruction 
or developments ; 

(2) To examine and approve the necessary expenditure required for the 
execution of projects for economic reconstruction or development ; 



-15 - 






(3) To supervise and direct projects for economic reconstruction or 
development ; 

(4) To execute directly special projects for economic reconstruction or 
development. 

These powers are very wide, and define, in conformity with modern legislative 
practice in China, the ultimate role which the institution is intended to play, rather 
than its status during the period of its development. The supervision of the execution 
of the Council's projects is entrusted to bureaux, committees and autonomous bodies. 
A committee acts in an advisory capacity to the Council ; a bureau is an executive 
body of the Council's secretariat ; while an autonomous commission composed of 
representatives of organised interests in a given sphere of activity is presided over by 
an independent chairman selected from amongst leaders in public life. Such a 
commission, once its programme is adopted by the Council, is to receive power to 
prosecute it, obtaining through the Council the necessary political and financial 
support for the realisation of its plans. 

At the beginning, the Council was advised by committees created ad hoc in devising 
the policy in regard to public roads, water conservancy, public health, and education. 
It is the policy of the Council to establish a secretarial bureau only when it is needed 
for the purpose of a specific activity. At present there exists : (1) A bureau of the 
Chief Secretary, to which, besides an administrative and technical staff, there are 
attached eight expert advisers on matters connected with agriculture, hydraulics, 
industrial chemistry, commerce, fishery, and mining ; a foreign staff of six advisers 
is also attached to the bureau ; (2) a bureau of public roads ; (3) a central field 
health station ; (4) bureaux of activities in the field (including agriculture and water 
conservancy). 

The continuous work of the Council clearly must be based on economic intelli- 
gence, but, being desirous to avoid overlapping and to utilise existing institutions, 
the Council refrained from creating a special service for the purpose. Instead, it 
appointed a Standing Advisory Committee, under the chairmanship of the Secretary- 
General of the Academia Sinica, and composed of its own Chief Secretary, the Director- 
General of the National Geological Survey, and the Director of the comprehensive 
studies and investigations conducted systematically under the authority of the 
National Government as a whole. To this Committee, all the technical work and plans 
of the Council are referred for advice, while the studies decided upon are distributed 
among the component institutions or entrusted to specialists selected by this 
Committee. 

With the appointment of the autonomous commissions, the Council decided to 
proceed slowly and experimentally, and, so far, has constituted only one for the 
improvement of silk and another for the rationalisation of the cotton industry. 

7. The expenditure of the Council since 1931 and until the end of September 
1933 has totalled $4,550,000, this sum being provided by the National Government. 

8. The work accomplished by the National Economic Council during its 
preparatory period may now be examined in greater detail, and also its prospects and 
policy for the near future, starting in 1934. 



— 16 — 



Chapter II. 



AGRICULTURE. 



i. Following the conclusion of a financial arrangement with the Reconstruction 
Finance Corporation of the United States, and the determination of the Chinese 
Government to utilise the proceeds for national reconstruction, a number of provincial 
Governments, Ministries of the Central Government, and private agencies interested 
in industrial development applied for subsidies or loans for projects of reconstructive 
work. Requests for assistance amounted to more than four hundred million Chinese 
dollars, and, of this sum, more than half was for projects associated with the improve- 
ment of agriculture (including hydraulic and irrigation work). Other projects were 
for railway construction, the erection of factories (for various purposes), the develop- 
ment of fisheries, the improvement of the merchant marine, posts, telegraphs and 
telephones, and the extension of elementary education in rural areas. Most of the 
provincial Governments making proposals submitted detailed budgets. 

2. The projects were carefully examined, and it was found that in some cases 
they related to work which was already in progress. a Some, on the other hand, were 
schemes fully prepared but not yet undertaken ; and some were ideas only, many 
of them of considerable interest but not elaborated into concrete plans. After due 
consideration, the Standing Committee of the National Economic Council decided 
that, while prepared to give help and technical advice to the provincial Governments 
in the practical working out of their plans, and to continue its activities in road 
construction and in public health in the provinces in which it had previously been 
operating, it would confine its assistance to comprehensive regional reconstruction 
in two areas, one in the north-west, the other in Kiangsi. 

3. The north-west (though undeveloped) and the Province of Kiangsi are 
both agricultural areas, and the decision to concentrate upon them is, in part, 
due to the acuteness of the agrarian situation. The depressed state of agriculture 
has attracted national attention, and investigations of great value have been carried 
out by many Government commissions, public institutions and private persons. 
The list of the major enquiries recently completed and now being conducted will be 
found in document No. 10 (see page 4). The first publication of the National 
Economic Council comprises a survey of the agricultural problems by Professor 
Dragoni, who made a report to the National Economic Council early in 1933. Surveys 
made under the auspices of the National Economic Council in the provinces of Kiangsi 
and Chekiang in November and December 1933 and January 1934 also helped to 
clarify the present position. The study in Kiangsi was made chiefly by the National 
Economic Council technical staff, Chinese and foreign, together with the two 
representatives of the League organisations, M. Briand-Clausen for agriculture and 



1 In Kansu and Shensi, for example, irrigation work for which subsidies were asked was 
already in progress. 



— i 7 — 






Dr. Stampar for health and rural reconstruction. The studies in Chekiang were 
undertaken under the chairmanship of Sir Arthur Salter, whose group included 
Professor Franklin Ho, a leading economist, of the Nankai University, Tientsin, 
and Herr Otto Klepper, formerly Finance Minister of Prussia and at present studying 
problems of rural economy at the invitation of the National Economic Council. 
An analysis of the reports presented by Professor Dragoni, as well as the text of the 
reports on Kiangsi and Chekiang, are published separately (see page 4). 

It should be added that several reports by M. Benito Mari have, in addition 
to his particular investigation, thrown light upon other more general problems of 
rural economy. 

4. All studies agree that the fundamental factors in the situation are the low 
output of Chinese agriculture ; the very high cost of credit facilities ; the burden 
of taxation, particularly of surtaxes ; and, in large parts of the country, the harsh 
and uneconomic system of land tenure. 

The report relating to Chekiang shows that, even in a normal year, this province, 
which is predominantly agricultural, did not produce sufficient food for its own needs, 
and imported rice from other provinces and from abroad. A high density of population 
is partly responsible for this anomaly ; on the other hand, it appears to be established 
that, not only the productivity per head, but also the absolute productivity of the land 
is on a low level in China. 



Table (quoted from Professor Dragoni' s Reports, pages 69-72 J 

Country Crop averages, 1918-1931 (in quintals of 100 kg. per hectare.) 

Wheat Rice Maize Cotton 

Germany 21.0 — — — 

Denmark 29.2 — — — 

France 14.2 — — — 

Hungary 13.8 — — — 

Italy 13.3 46.4 15.2 — 

Poland 12.8 — — — 

U.S.S.R 7.6 — — — 

Canada 10.9 — — — 

United States of America . 9.9 23.2 15.5 1.8 

Japan 16.0 34-2 — — 

India 7.1 14.9 — — 

Egypt 17.7 30.1 22.6 4.5 

China 7.3 18.9 9.7 1.9 

5. This low productivity is due, in part, to technical and, in part, to social 
and economic conditions of land cultivation. Technical opinion in China supports 
the view, expounded in the Dragoni report, that seeds best adapted to the condition 
of the country are not widely used, nor are artificial fertilisers used in sufficient 
quantities. Rotation of crops follows ancient practice and habits, and the scientific 
control of animal disease and insect pests is not adequate. Animal husbandry, 
practically unknown south of the Yangtse, would certainly improve the farmer's 
standard of living. An improvement in the primitive implements used by farmers, 
which require an excessive expenditure of human labour, is also an urgent need. 
A number of research stations, both national and provincial, are experimenting with 
and improving the seeds of the staple crops ; but, while it is possible to devise 
ways of improving the technical conditions of farming, it is not easy to bring the 
improvements to the attention of the farmer or to persuade him to adopt them, 
particularly as co-operative societies are still relatively undeveloped. 



— 18 — 

6. Of the economic and social factors, perhaps the system of tenancy is the most 
disquieting. The system of land tenure has been the subject of intensive study in 
China, by special commissions of the National Government, by the Chinese Land 
Economic Association, by national and private universities and institutions, and, 
finally, by the technical staff of the National Economic Council. It would appear 
that, while there are few landowners on a very large scale, as in certain European 
and American countries, the system of tenancy is, south of the Yellow River, the 
predominant one. In the Yellow River Basin and in the North (Shensi, Shansi, 
Hopei, Shantung and Honan), 69 per cent of the cultivators are owners of their land, 
18 per cent own a part of their land and rent the remainder, and 13 per cent are 
tenants. On the other hand, in the Yangtse River Basin and in the South, which 
includes 61 per cent of the total population, tenancy is the most frequent form of 
tenure ; 40 per cent of farmers are full tenants, 28 per cent are part tenants, and 
only 32 per cent own their land. J In certain provinces, the proportion of tenants is 
much higher. In Fukien, for example, it is 69 per cent, and only 9 per cent of the 
cultivators are owners. The number of tenants is on the increase, since owner- 
farmers are being forced, because of the depression and the decline of agriculture, 
to sell their land or to mortgage it on such terms as to leave them little better off 
than tenants. As a rule, the new owners are absentees, and frequently merchants or 
officials. 

This state of affairs is aggravated by the conditions of tenancy. The forms 
of land tenure vary widely. Cash payments of rent appear in most districts to be 
the least usual, and payments in kind, either of a fixed amount or of a fixed share of 
the farm produce, are the rule. The landlord formerly contributed, and in parts of 
the country still does so, a part of the farmer's capital in the form of seeds, and in 
rare cases of live-stock and implements. So great are the complications of the various 
systems that it is hard to arrive at any exact conclusions as to the scale of rents. 2 



1 These figures have been compiled by Professor Franklin Ho, of Nankai University, from 
information supplied by the Legislative Yuan's Bureau of Statistics. 

A table showing the extent of tenancy in twelve provinces is given by Dr. C. K. Ping in 
his article " Bodenreform in China " in the Jahrbuch der Bodenreform, Vol. 19, No. 4. 



Province 



Peasant owners Mixed Tenants 

Per cent Per cent Per cent 

Kiangsu 38 30 32 

Anhwei 28 17 55 

Hupei 22 27 51 

Szechuen 22 21 57 

Yunnan 46 2O 28 

Kweichow 46 19 35 

Hunan 34 32 34 

Kiangsi 27 34 39 

Chekiang 27 31 42 

Fukien 9 22 69 

Kwangtung 30 24 46 

Kwangsi 34 15 31 

Average 32 25 43 

2 Professor Franklin Ho, a very prudent economist, estimates, in a study made in Chekiang 
for the Institute of Research in Social Science in 1928 (since when rents have been steadily 
rising), that the farmer paid 45 per cent of his produce to his landlord. It is the custom, in some 
provinces, to pay only according to the basic crops produced ; but, in others, |the share is calcu- 
lated out of the total produce of the farm, both by-products and main products. This figure 
should be increased, since it did not include deposits paid by the tenants (and not as a rule 
recovered), presents which it is customary to make to the landlord, and payments for the 
transportation (sometimes amounting to an extra 8 per cent on the rent) of the produce to the 
landlord's farm or agency. 



— ig — 

The studies which have been made in Chekiang and Kiangsi and by Professor 
Dragoni suggest, however, that the level is surprisingly high. Some striking cases of 
abuse are mentioned in the Kiangsi report, of which the following is typical : 

" After repeated questioning, a tenant who was a member of a co-operative 
society stated that, out of 17 piculs which he harvested, he had to hand over 
11 piculs to his landlord ... It was stated by the tenants in a few cases that, 
even when harvests were poor, a fixed sum of money still had to be paid as rent, 
and a competent Chinese observer who travelled extensively in the province 
states that he knows of some few cases where tenants are obliged to repay to the 
landlords ten times as much seed as was lent to them " (Kiangsi report, pages 
8 and 9). 

In three or four provinces, notably in Chekiang, attempts have been made to 
lower the height of rents (or to prevent them from rising still further) by legal means. 
The report relating to the economic condition of the Chekiang Province states in this 
connection : 

" Chekiang has gone further than any other province in attempting compul- 
sory rent restriction. The standard is a 25 per cent reduction to a maximum 
50 per cent of production — that is (with some exceptions), the legal maximum 
rent is 37 per cent, or just over one-third of the tenant's production as rent, out 
of which the landlord defrays the taxes. 

"It is difficult to ascertain just how far this legal requirement has been 
made operative. It is said that in many cases it is not applied (rents sometimes 
rising to 60 per cent or even higher) ; that the legal machinery to settle disputes and 
enforce the law is inadequate ; that the landlord, exacerbated by the law, has 
other ways of compensating himself at the expense of the tenant ; and that the 
benefit of rent reduction is exploited by the Peasants' Union (which, formed 
originally to enforce rent reduction, has too often become a new instrument of 
exaction), so that the tenant retains little advantage himself. Nevertheless, 
the measure represents perhaps the most satisfactory and the most successful 
experiment yet made in China in alleviating the position of the tenant. If the 
machinery for enforcement can be made effective, and the tenant relieved of 
supplementary exactions, one-third of the produce as a maximum rent would 
seem to be satisfactory." 

Closely related to the problem of tenancy is that of the small size of holdings. 
The landowner, as a rule, neither cultivates his property on a plantation system nor 
lets it out in large blocks. » The inconvenience of these small units, from a technical 
point of view, is increased by the fact that a part of the land (as much as 8 per cent 
in some districts) is occupied by graves, and that the scanty holdings of a farmer are 
not compact, but are split into fragments. The strip system prevails, the farmer 



1 The average size of farms, according to Professor Dragoni, appears to be less than five acres 
(Professor Dragoni's report, page 19). For Chekiang, Professor Franklin Ho gives the following 
table : 

Size of farm in mow „_ , , , 

(1 acre - 6 mow) Percentage of farms 

Below 5 38.5 

6 to 10 33° 

11 to 25 21.0 

26 to 50 7.0 

51 to 100 0.2 

Total 99.7 



— 20 — 

cultivating a number of diminutive pieces of land, often of an inconvenient shape 
and situated at some distance from each other. 

7. Another burden, besides the system of tenure, which weighs heavily upon 
agriculture, is the land tax. This tax was based on an assessment made over two 
hundred years ago, and in the course of time has become obsolete and anomalous ; 
nevertheless, it is moderate. However, during the last few years, the tax has, in many 
provinces, been multiplied several times by the imposition of surtaxes. Though 
legally payable by the landowner, the tax appears, in many cases where tenancy 
prevails, to be paid in whole or in part by the tenant. In Kansu it was discovered, 
for example, that the tenant paid 60 per cent of the tax and the surtaxes. It is not 
possible to give any figures for the whole of China demonstrating the burden which 
this tax causes, since conditions vary from one province to another. A careful study 
was made (by the group of the National Economic Council) of the methods of 
collection, amounts paid and amounts received by the provincial Government. The 
results are enumerated in the introduction to the report : 



" The old land tax, with all its faults, would by itself, if legally applied 
without additional charges or exactions, contribute no undue burden. The 
features of land taxation which make it a central factor in agricultural distress 
are (a) the surcharges, (b) the inequalities between different regions, (c) the system 
of tax collection, with the waste and exaction that it involves. 

" Surcharges in Chekiang are a recent phenomenon. They have nearly all 
come into existence since 1927. They now range from 29 to 30 per cent in the different 
Hsiens, and they are extremely unequal in incidence, falling much more heavily 
on the poorer localities. In five relatively rich Hsiens taken at random, for 
example, the surcharges were found, on the average, to involve an excess over 
the land tax of only 25 per cent. In five relatively poor Hsiens, the average 
excess involved was over 350 per cent. 

" Among the first five, the total land taxation only, amounted in one case 
to over 65 cents a mow ; among the latter, it averaged over $1, and in one Hsien 
reached $2.80. 

' ' With such gross inequalities, a general average is difficult to find, and would 
be misleading if given. 

"But even these inequalities, and these locally excessive legal charges, 
might, in most cases, be tolerable, though unjust, if they represented all that 
the peasant had to pay. Unhappily, the system of tax collection leads to addi- 
tional exactions, which add greatly to the real burden of taxation, admits of 
evasion on a large scale, especially on the part of those best able to pay, and results 
in a great loss of revenue (or alternatively of an opportunity for substantial 
reduction of tax rates). At the crucial point of the intricate chain of tax-collecting 
stand, as elsewhere in China, the unofficial registrars with their books of ' fish 
scale ', transmitted from father to son, as the only record of taxable owners and 
proprietors ... It is impossible to estimate what this system involves in 
evasion and extortion. But all the evidence suggests that both are on a very 
large scale indeed. In many districts, the small landowner is both confused 
and overwhelmed by the multiplicity of exactions, legal and illegal . . . The 
farmer's case is the harder because so much of the expenditure brings him no 
visible benefits. The surcharges are mainly for ' safety ' (but the benefits to 
himself of military expenditure are not very visible to the peasant) ; ' education ' 
(but the money is raised almost wholly from the land and spent disproportionately 
in Hangchow and the larger towns) ; and ' reconstruction ' (mainly railways 



— 21 — 

which only serve a few areas, and roads which are scarcely used by the 
peasant, and mean for him land confiscation as well as taxation)_ 

" Land tax is, of course, in any country where economic conditions resemble 
those of China, the main source of provincial revenues. And, heavy as are the 
burdens of land taxation in Chekiang, the total revenue shown in the accounts 
as received would probably not necessitate an excessive burden if it were equally 
and inexpensively collected without large evasion, misappropriated exactions 
and grossly disproportionate incidence in different districts. With an efficient 
system of collection, reductions in rates could be made and at the same time the 
revenue maintained or even increased. 

" But such a reform must be immensely difficult, lengthy and, in its initial 
stages, expensive. It would require a radical administrative re-organisation and 
an adequate survey of land and of ownership, kept up to date by registration of 
sales . . . Such a fundamental reform of the land system must be a lengthy 
business, extending over a number of years. And some reform is urgent. The 
first necessities are simplification, equalisation and reduction, and a removal, 
or at least mitigation, of some of the worst anomalies of assessment." 

8. Whether rents and taxes are tolerable depends in some degree upon the 
strength of the farmer to sustain them. In China, the labour of the farmer is not 
assisted by the provision of facilities for cheap credit or for marketing his crop 
advantageously, or for purchasing his necessities. It is difficult to obtain figures showing 
the rate of interest charged by rural moneylenders. l In many countries it has been 
found that the best way of dealing with such a situation is by the development of 
co-operative societies. But a co-operative movement, though it has been begun 
in certain provinces under the influence of such bodies as the Famine Relief Commis- 
sion, and is actively supported by the Governments, is still in a rudimentary stage of 
development. In Kiangsi, for example, which has a population of 27,563,000, there 
are only about 10,000 members of these societies, most of whom are probably not 
active members. The Dragoni report gives the following tables showing the number 
of societies in China : 



Table A. — Co-operative Associations constituted in 1925-1932 
(Central Statistical Bureau). a 

Percentages of the Total Numbers of Each Group. 





Credit 


Consump- 
tion 


Produc- 
tion 


Market- 
ing 


Purchas- 
ing 


Other 


Total 


1925-1927. . . 

1928 

1929 

1930 

1931 

1932 (part) . . 


0.2 

37 

26.4 

25-7 
31.2 
12.8 


1.7 

4-3 

8.6 

22.2 

53-0 

10.2 


0.9 
9.9 

14.9 

59-9 
14.4 


3-3 

10. 
20.0 

43-4 
23-3 


1.9 
17-3 
57-7 
23.1 


57-1 
28.6 

14-3 


0-3 

3-3 

23-3 

24.9 

35-3 
12.9 




100. 


100. 


100.0 


100. 


100. 


100. 


100. 



1 Professor Dragoni came to the conclusion that the average was 35 per cent and that in 
some cases, not very rare, it reached more than 100 per cent. 

2 Professor Dragoni's report, pages 134 and 135. 



22 



Table B. — Percentage of the Number of Societies divided according to the 

Number of their Members. 



Number 
of members 


Credit 


Consump- 
tion 


Produc- 
tion 


Utilisa- 
tion 


Market- 
ing 


Purchas- 
ing 


Other 


. 

Total 


I to 25 

26 to 50 

51 to 75 

More than 100 . . 


695 
235 

3.6 

i-5 

1.0 

0.9 


237 

17.2 

0.9 

9-9 
33-6 

57 


43-6 
33-3 
10.3 

6-3 
54 
1.1 


66.2 
26.3 

4-5 
0.7 

2-3 


31.2 

31-9 

15.6 

6-3 

11. 9 
3-i 


69-3 
15-4 
H-5 

3-8 


14-3 
71.4 

14-3 


645 

23-9 
4.0 

2.4 

3-5 

0.7 




100.0 


100. 


100. 


100. 


100. 


100. 


100. 


100. 



The management and organisation of the existing co-operative credit societies 
does not yet appear to have universally reached a high degree of efficiency. l 

Co-operative societies for marketing and buying are still fewer than credit societies, 
but are needed as much, if not more, than credit societies. The farmer is in a very 
poor bargaining position as against the merchant. This was pointed out in the report 
on the studies made last December in Kiangsi, a paragraph (page 10) of which may 
be quoted : 

" In addition to his burdensome taxation and land-tenure conditions, 
the Kiangsi farmer is faced with a serious decline in the price of agricultural 
produce and an enormous discrepancy between prices which he can obtain 
locally and actual market prices in the large towns. According to figures furnished 
by the Provincial Reconstruction Bureau, the difference between prices paid 
to Kiangsi farmers for their produce and prices charged to consumers in Shanghai 
may amount to no less than 100 per cent. This question of middlemen's profits 
is regarded in official circles in the province as one of the most important problems 
in the work of rural reconstruction." 

Various provinces, notably Kiangsu, have attempted to deal with this problem 
by providing warehouses where the farmer can pledge his grain, thus enabling him 
to hold it off the market until he can obtain the most favourable prices. 

9. Another adverse factor in farm economy is the absence of a cheap system 
of communications. When it was recently necessary on account of famine to transport 
wheat into the province of Shensi, it was found that the cost of transportation was 
forty times as great as it would have been upon a railway. The Government is, 
however, fully aware of the urgency of improving the system of communications. 

10. Having received the various reports reviewing the situation of agriculture, 
the National Economic Council came to the decision to assist, both with financial 
and technical aid, the provincial Governments of Kiangsi and of Shensi and Kansu 
in comprehensive projects of rural rehabilitation. 



1 Some details will be found in the Kiangsi and Chekiang reports. 



— 23 — 

ii. Kiangsi has for several years been the scene of guerilla warfare with Red 
troops. The Central Government concentrated its principal political and military 
forces in the province ; a considerable part of national revenue goes to financing 
operations, military and political, in this area. The devastation and many-sided 
disturbances of social relationship consequent upon protracted civil war of the character 
described called for urgent measures of rehabilitation, and this explains the reasons 
which have led the Central Government to select this province for the field activities 
of the National Economic Council. As active policies still await determination, it will 
be pertinent to indicate the action proposed by the survey group ; it relates to : 

I. Land tenure and taxation ; 
II. Co-operative societies ; 
III. Social welfare and amelioration. 



I. Land Tenure and Taxation. 

The fundamental factors in the Kiangsi situation which determine every aspect 
of the life of the province are the economic distress of the farmer and the despair and 
resentment which it causes. 

The proposals made are on the assumption that, in view of the difficult situation 
so created, drastic measures are both necessary and desirable. These proposals include 
the conversion of the tenant-farmer into an owner-farmer, with full legal property 
in the land he tills. The type of rural society which would seem to correspond best 
with the needs of the population of the province is a society of farmer-owners, tilling 
and managing their own small or moderate-sized properties, with the aid of members 
of their own family or with a moderate supplement of hired labour, any large properties 
that may be worked by a great number of hired hands or leased out into tenancies 
being abolished, and tenancy itself being an exceptional arrangement arising only 
out of special conditions in the family or the character of the land. 

The report recommends that, in providing for the general emancipation of the 
tenants, the procedure should be such that, while still making possible a few minor 
tenancy arrangements by small owners which might be to the convenience of all 
parties, it would, by giving each tenant a prima facie ownership, put upon every 
owner who is not tilling or managing the whole of his property the onus of proving 
his claim to continue his ownership as a small owner. The report of the Group of 
Experts indicates what should be the guiding lines for the contemplated reform. 

The land-tax system is the core of the problem of rural distress, and no remedy 
can be effective until the whole system (including the method of collection) is reformed. 
After a short visit, the experts were unable to make detailed proposals on so intricate 
a problem, but they urge that it should be immediately studied with a view to action 
at an early date. 

The introduction of a progressive land surtax as well as the reform of land 
taxation, as recommended above, are dependent on the quick carrying through of 
the work of land registration as already begun by the provincial Government. 

Since the provincial Government has already started work in this field, the report 
suggests that it would be desirable to assist them both by subsidies and by lending 
them the necessary staff for this work. In view of the national importance of the land 
registration problem, such assistance, as recommended, may prove to be of the 
greatest value, not only for the Province of Kiangsi, but for the whole country. 



— 24 



II. Co-operative Societies. 



The farmer's need of credit, and the terms on which he can obtain it, are almost 
as important to him as the taxation he pays and the tenure on which he holds his 
land. 

In the absence of special assistance or organisation, the farmer has great difficulty 
in obtaining credit even for the short term between the time of sowing and that of 
harvest and sale ; and where he can obtain it he has to pay exorbitant rates of interest. 
This need has led to the establishment of some 300 such credit co-operative societies 
in Kiangsi. This co-operative movement has developed under the initiative and 
direction of two central organs — an office of the provincial Government and another 
of the Famine Relief Commission. These offices are in the same building ; but, since 
they act separately, some duplication of work and staff is involved. At the same time, 
the membership of the societies amounts to only about 10,000, and (with few 
exceptions) the societies are concerned only with the provision of credit. The co- 
operative purchase of farm implements and the sale of farm produce would, however, 
be of great benefit to the farmers, and the National Economic Council experts 
therefore consider that the societies could be usefully extended both in number and 
in the scope of their functions. Moreover, a central co-operative organisation for the 
province would be of great service to farmers by providing certain capital, plant or 
storehouses, which would enable produce to be disposed of on more favourable 
terms. They therefore propose : 

(1) The amalgamation of the two central organisations and the formation 
of a Central Co-operative Council, which, in addition to the general work of 
promoting and directing the co-operative movement, would establish small 
industrial plants ; 

(2) The extension of the existing co-operative societies ; 

(3) The formation of new buying and selling co-operatives. 



III. Social Welfare and Amelioration. 



There remains that vast field of work required for social welfare and amelioration 
of all kinds, in general and specialised education, in agricultural instruction, and as 
regards health. 

For this purpose the report proposes : 

(1) The organisation and establishment of a Provincial Welfare Centre in Nan- 
chang. — This centre should be divided into a number of departments responsible 
for the following duties : 

(a) Mass education, and the education of true rural workers. 

(b) Agriculture : This department should serve to a greater extent the 
needs of practical agriculture as adapted to the needs of the farmer. 

(c) Health : This department (which might be named the Provincial 
Health Centre) should have special sections for laboratory examination and 
sanitary engineering, and for the establishment and management of a new model 
provincial hospital. 

(d) The new Co-operative Office, which has already been described, and 
for which provision has been proposed, might be regarded as a fourth department 
of the provincial centre. 



— 25 — 

The whole of the provision of $560,000 under this section may be regarded as a 
capital investment involving no recurrent expenditure. Current expenses can be met 
from existing provincial funds. 

(2) The organisation and establishment of rural welfare centres in ten rural 
districts. — These ten rural centres should be organised on the same lines as the 
provincial centre, and should serve as the local machinery for carrying out its work 
in the rural areas served. 

They should each include among their work : 

(a) Mass education and a model elementary school ; 

(b) The establishment of a practical agricultural station, with a teacher 
who could provide practical courses for the farmers ; 

(c) Assistance in the formation and working of the co-operative societies, 
elsewhere proposed, in their respective districts ; 

(d) The organisation of health services, including, in particular, treatment 
of urgent sick cases, maternity work, sanitary engineering work (model wells, 
latrines and drainage, etc.) and health education. 

(3) Emergency help for the refugees and unemployed. — Immediate help is required 
to feed and shelter the refugees and the unemployed, and to tend their health. 

12. The reasons which dictated the selection of the north-west were different 
from those which determined the choice of Kiangsi. There.it is not so much a process 
of restoration that must be assisted as measures calculated to prevent recurrent famine 
and pestilence and provide a reasonable foundation for the development of a very 
large central area commanding communications between prosperous and less favourably 
situated provinces, and demarcating diverging types of agriculture and civilisations. 
In this area, population is scarce, land is plentiful and, if irrigated, its good quality 
yields adequate returns, two crops being harvested in a year. The country is moun- 
tainous, favourable for the plantation of forests and the rearing of horses, cattle and 
sheep ; in this respect, widely differing from South and Central China. The farmers 
are thrifty and hard-working. On the other hand, land and water communications 
are difficult, the rainfall is slight, irrigation works are undeveloped, and droughts 
are very severe. Cotton, grown in numerous varieties, needs rapid improvement. 
Afforestation methods are too primitive, and natural forests are neglected. Animal 
husbandry lags far behind, while animal disease is rife. Taxation is crushing, poppy 
cultivation occupies far too great an area, and, where irrigation does not extend its 
beneficial effects, the farmers lose their naturally progressive spirit, and lapse into 
despondency and a disordered way of life. 

Recent studies inaugurated by the Railway Administration, the Geological 
Survey, the International Famine Relief Commission, and other agencies, facilitated 
the survey begun in February 1933 by the technical officers of the National Economic 
Council. Dr. Stampar, M. Bourdrez and M. Okecki are associated in the inves- 
tigation of rural reconstruction, irrigation and road-building prospects in selected 
areas of the two provinces. The survey will last some six weeks, but work on roads 
and irrigation schemes has been already started. The irrigation operations are in 
Kansu, Shensi and Suiyuan, and had been partially carried out by the provincial 
Governments with the aid of loans from the International Famine Relief Commission. 
These are now being examined by the technical service of the National Economic 
Council. 



— 26 — 

It is understood that the Cotton Commission is interested in the progress of these 
operations, since, if irrigated, Shensi would be an eminently suitable centre for 
cotton cultivation. 

The road linking up Shensi with Kansu was also started last year and will be 
completed in 1934. It receives full financial support from the National Economic 
Council to the extent of $800,000, and traffic is to be operated on it under the 
auspices of the National Economic Council, for which purpose a sum of $500,000 has 
been appropriated (see Chapter VI, § n). 

A road to the south-west is being prospected and its construction will begin 
shortly. 

Health and maternity centres (of the type proposed for Kiangsi) will be 
established in several localities on the main lines of communication, and hospitals 
developed. A considerable effort is required to survey and control an endemic 
centre of pneumonic plague. Urgent measures are under study for the control of 
animal diseases, which have brought great loss to the farmers in the last few years. 

This continued effort, if successful, would prevent disasters such as in the last 
three years have caused the loss of one and a half million sheep and half a million 
cattle. The maximum result would be to open up this vast area for the greater benefit 
of the national economy as a whole. 

It is proposed to spend in all $2,500,000. 

13. It should be emphasised that, although the work which the National 
Economic Council is about to undertake in Kiangsi and the north-west is directed 
to improving the condition of agriculture, the Council is not the constitutional organ 
responsible for the nation's agricultural policy. That function belongs to the Ministry 
of Industries, which is charged with day-to-day administrative duties. The Ministry, 
in spite of having the responsibility simultaneously for agriculture, industry and 
commerce, has extensive agricultural interests. Besides its purely executive duties, 
it has organised a research bureau which, during the last two years, has carried out 
a number of surveys of practical value, notably on crop improvement and the 
prevention of animal disease. It has also organised a system of voluntary reporters, 
now numbering 6,000, who send in to the Ministry regular reports of local farm 
conditions. In addition, the enforcement of the Land Act of June 1930 falls within 
the Ministry's competence. 

This Act represents the programme of desired future accomplishment rather 
than a code of actual practice. As indicating the goal of land reform in China, it is 
therefore of peculiar interest. The Act consists of about 400 articles, and covers 
nearly all aspects of the agrarian situation. Its general effect, if carried out, would 
be to change China from a country mainly of tenants, who, in comparison with the 
smallness of their holdings, pay very high rents, into one of small farmers, many of 
them owners, farming compact holdings. The most striking provision was that, where 
a tenant had cultivated his land for ten years, and the landlord was an absentee, the 
tenant would apparently, without any form of payment, become an owner. Moreover, 
the provincial authorities are given power, where they think fit, to impose a limit 
on the amount of land to be owned by any one person, and to expropriate, with or 
without compensation, all owners whose possessions are in excess of this limit. 
The general trend of the Act is, however, not to abolish the system of tenancy 
altogether, but to reform it and to protect the farmer against the landlord. 

Provision is definitely made for a fixed rent. The limit is put at 37% P er cent 
of the produce. The tenant is given reasonable security, and cannot be evicted unless 
he neglects to pay his rent or the landlord himself wishes to cultivate the farm. If 
the landlord wishes to sell, the farmer is to have a prior right of purchase. Upon 



— 2 7 — 

termination of a contract of tenancy, the tenant is to be compensated for improvements 
which he has made. Increase of crop produce, due to these improvements, is not to 
be counted in the calculation of the landlord's share. 

One of the most interesting provisions is for the re-arrangement of strips into a 
compact holding. Provided that more than half of the farmers of a district do not 
object, this redistribution, with its resulting advantages, can be compulsorily carried 
out by the provincial authorities. Provision is made for the compensation of owners 
who suffer loss in the process of redistribution. 

The law also provides for an improved system of land tax, including a periodical 
assessment, and one in which, according to modern custom, allowance is made in 
respect of improvements due to the investment of capital. By permitting the tenant 
to deduct the land tax from the rent where he himself has paid it, the incidence of the 
tax is made to fall on the landowner. 

A central land office and a provincial land office are provided for. But 
this, together with other provisions of the Act, forms a programme for future 
accomplishment . 

14. The application of more immediate administrative measures was called 
for by the exigencies of the provinces in the Yangtze Valley (Hupeh, Hunan, Honan, 
Anhwei and Kiangsi), which are under the special jurisdiction of General Headquarters. 
Prolonged civil disturbance in parts of these provinces, the eviction of landowners 
by the Communists, and their return when the areas were recovered from the Red 
armies, had produced a very difficult agrarian situation. Titles to land were in dispute ; 
evidence of possession had been lost ; part of the population was inclined to challenge 
the whole system of tenancy. To meet the situation and to restore ordered conditions, 
a number of regulations, mostly dealing with the manner of restoring landowners 
to their property, were issued by headquarters. A study of these provisions was made 
by Professor Dragoni at the Government's request, and will be found in his report. 

15. The settlement of the special problems of Kiangsi should be regarded as 
only a part of the agrarian question in China. Conditions similar to those in that 
district exist, with some modifications, in most of the provinces south of the Yangtze. 
The increasing poverty of the farmer, the spread of undesirable forms of landholding, 
the flight of capital from the countryside and the decline of rural enterprise were 
reflected in a growing tension and a demand in some quarters for radical changes in 
the social system. Faced with this situation, the Government decided to appoint a 
new body, called the Rural Rehabilitation Commission. 

16. The Commission was formed in May 1933, and consisted of the Ministers 
of Finance, Railways, and Industries, and of a number of eminent agriculturists and 
economists. One of the difficulties in determining the details of a land policy in China 
is the lack of accurate information about social and economic conditions. The 
Commission's work has therefore, up to the present, been exclusively one of enquiry 
and investigation. Through the members of Central Government services who are 
resident in the provinces, as well as the personnel of the Consolidated Tax Adminis- 
tration, it has conducted surveys in seven provinces, including Kwangsi, about 
which exceptionally little was previously known, and has received from these districts 
information about rents, land taxes, land tenure, types of soil and climate and crops, 
and the development of co-operative societies. The method of survey was to take a 
limited, but sufficient, number of Hsiens in each province, and to submit questionnaires 
to each householder, to the local authorities, and to the Hsien magistrate. The results 
of two of these surveys are now available in Chinese. Other surveys were carried out 



— 28 — 

of the tea, milk and cotton industries, all the processes, so far as agriculture was 
concerned, being minutely studied. An exchange of views was then held with the 
organs of the National Economic Council, which had been conducting enquiries on 
lines somewhat similar, and a report, with recommendations, is shortly to be published. 



17. On the eve of the fourth plenary session of the Central Executive Committee, 
the highest constitutional organ, the following telegram was despatched by the 
Commander-in-Chief to the Executive Yuan. This significant document reads : 

" I have received President Wang's telegram of 17th inst. The so-called 
agrarian policy of the Red bandits is merely their weapon of war and nothing 
else. Young military commanders may at first be lured by the attractive propa- 
ganda of the Reds, but on further observation they always come to the conclusion 
that the so-called land policy of the bandits is sheer robbery. There are still 
some members of the party who are aggrieved at the failure of the Government 
to emulate and enforce such a land policy. Even if the Red bandits had a land 
policy, it would have to be determined by their political creeds. If we wanted 
to adopt their policy, we would have to discard our party principles and adopt 
a new name for our party like the Fukien insurgents. The land policy of the Red 
bandits is merely a strategic means, but it is not a political policy. At first the 
bandits may hold out the redistribution of land as a bait to the peasantry. 
Later, however, when their object is attained, they will so distribute the land 
that the more fertile plots will be given to members of their own party (the 
Communist Party), and the rest will be redistributed entirely on the basis of 
personal likes or dislikes. Moreover, the Red bandits also tolerate the system 
of vicarious farming, with the result that a new class of landowners soon rises 
to replace the old who have been ruthlessly murdered. In order to counteract 
the tendency on the part of the peasants to save and hoard the fruits of their 
labour, the Red bandits therefore often carry out their so-called farm-investi- 
gation movement, during which the new landowners are again dubbed ' rich 
or wealthy ' and persecuted. When the land was first redistributed, the land- 
owners and their families were often murdered. During the farm-investigation 
movement, the new landowners are subjected to severe persecution and their 
grain and belongings are taken away from them by force. This is done in order 
to get rid of personal ownership of land, and to prolong the period of ' Red 
pauperism ' so as to force the poor to join the ranks of the Red bandits and fight 
their battles. Such being the strategic tactics of the bandits, many peasants 
have fallen victims of their cajolery. The consequences of such tactics have 
been most pathetic and terrible to the peasants, who often leave their farms and 
are later faced with starvation. To hide their intentions, the Reds have adopted 
the name of agrarian policy. Their crime is therefore ten thousand times more 
serious than that of those who masqueraded in Europe in the name of Liberty. 
Is our party's programme for the equalisation of land to be compared to this ? 

" The so-called agrarian policy is two-sided, dealing as it does with, firstly, 
the question of redistribution, and, secondly, the exploitation and readjustment 
of land. There is no lack of arable land in this country, which is more than 
sufficient for distribution among the population. Our land is, however, in urgent 
need of readjustment. Even in densely populated provinces, there are few 
landowners holding more than several hundred or several thousand mows of 
land, the majority being small landowners owning about thirty or forty mows. 
The question of exploitation and readjustment is therefore, in my opinion, 
more urgent than that of redistribution. 



— 20. — 

" As regards the question of redistribution of land, it is the settled policy 
of the party to realise the system of equalisation of land-ownership. The ultimate 
object is to give land to all tillers of the soil. The exploitation and readjustment 
of the land should be carried out through co-operation and collective cultivation, 
so that rural revival may be realised. It is the settled policy of our party to 
oppose class strife. The redistribution of land should thus be achieved by peaceful 
means, so that all tillers of the soil may gradually be given their share of the land. 
According to the Regulations, promulgated last year by the Commander-in- 
Chief's Headquarters for the Honan-Hupeh-Anhwei Bandit-Suppression Forces, 
governing the readjustment of land, private ownership of land is recognised 
and protected. It is, however, subject to two restrictions — namely, (i) that 
landowners must give all persons in the village capable of tilling the soil an 
opportunity to work on their farms ; and (2) that the maximum land holdings 
are to be limited ; those holding land of an area in excess of the maximum 
limit are to be subject to graduated taxes. Revenue derived from these taxes 
is to be employed for financing agricultural enterprises. In this manner, not 
only will the landowners be induced to invest their capital in other than agricul- 
tural enterprises, but those capable of tilling the soil will be given land to cultivate, 
and bloodshed avoided. In order to insure sufficient land to the peasants, 
landowners, owner-farmers and peasants are encouraged to form co-operative 
societies for the exploitation of land. Whenever a piece of land in the village is 
offered for sale, these societies will be given the priority in acquiring such land. 
This will result in the gradual acquisition by these societies of all farms in the 
villages. Those who are not capable of tilling the soil will not be made members 
of the society, while those who are capable in this regard will be given land to 
cultivate until they choose to quit the society. At the same time, there will be 
no need for the sale or purchase of land, and all injustices in connection with the 
redistribution of land will be avoided. The farms acquired by the co-operative 
society will be distributed to members for cultivation, with ownership, however, 
remaining in the society. For this privilege, members are required to pay to 
the co-operative society a farm rent which will be used for the improvement of 
methods of cultivation. The organisation of such societies will thus not only 
facilitate the development and exploitation of the land, but also lead to the 
gradual elimination or persons who own but do not cultivate the land. 

" Moreover, the purchase of land by such societies is likely to be effected 
through loans from banking interests, so that the Government need not either, 
float loans or take forcible measures for the acquisition of the land. The redistri- 
bution of the land will also be determined by the societies themselves in 
accordance with the needs of their members, so that there will be no injustice, 
which is inevitable to the Soviet system. The exploitation and readjustment 
of the land may be so effected that co-operation and collective farming may 
be finally attained. 



' These plans have been enforced in the various bandit-suppression areas 
by the Bandit-Suppression Headquarters. Though they are not perfect, yet they 
are systematically devised and suit the conditions peculiar to the country. 
At least, they are practicable and may form the agrarian policy of our party. 
I have expressed these views on the land problem for the reference of our party 
comrades who are interested in the problem. I hope our comrades will not forget 
the stand of our party vis-a-vis this particular question, nor allow themselves 
to be misled by Communist propaganda regarding the so-called agrarian policy. 



— 30 — 



Not only will the success of these plans in the suppression of bandits depend on 
your efforts, but the future of the State and the party is also in your hands. 
Besides despatching this message expressing my views on the land problem, 
I will continue to report to you on conditions in the bandit-suppression areas 
at regular intervals. — Chiang Chung-CHENG." 

18. This telegram was followed by careful deliberations on the part of a special 
Committee of the Executive Yuan, appointed for the purpose of formulating a compre- 
hensive land policy. In the course of its discussions, the Commission heard in evidence 
Sir Arthur Salter, Dr. Stampar and M. Briand-Clausen. As a result of its conferences, 
the Committee reported that, in view of the magnitude of the problem involved 
and the lack of adequate information, it could not pass beyond the enunciation of 
principles to the recommendation of concrete measures. 

The fourth plenary session of the Central Executive Committee of the Kuomin- 
tang accordingly referred back the matter to the Central Political Council. 

The National Government thereupon requested the Minister of the Interior 
and the Minister of Finance, both of whose departments had begun to make studies 
of agrarian problems, to co-operate with the National Economic Council for the 
purpose of forming a commission of three members to make a comprehensive study 
of the agrarian situation, including all important relevant topics. It was understood 
that the work was not to be limited to investigation, but that recommendations for 
reform were to be made and that the work was to be concluded in six months. The 
National Economic Council, in addition to its studies in Kiangsu and Chekiang, is 
conducting at present a survey of certain localities in Shensi and Kansu and also 
making a study of rural credit. The advisory Committee of the National Economic 
Council will appoint a technical secretariat which will be responsible for the evidence 
to be submitted to the Committee of Three. In the collection and elaboration of the 
evidence, the League experts will also participate. 

One of the first studies which will be conducted is of the practicability of land 
registration. Without some sort of land survey, the reform of the land tax and its 
conversion into a productive and equitable source of revenue, with all the social and 
economic benefit which would result from such a measure, can hardly be effected. 
But the cost of making a survey by the usual methods is prohibitive ; a moderate 
estimate puts it at $150 million for the whole of China. The suggestion has lately 
been made, however, that, by using aircraft for the survey, the cost might be drasti- 
cally reduced. The expensive part of land registration is not the discovery of the 
owners of the various plots of land, but the measuring and delimitation of the holdings. 
It is claimed that, in some regions, a good aerial map would give at a glance all the 
information which is required. The Advisory Committee is therefore arranging for a 
further study of this suggestion, and of others upon the same lines. 



— 31 — 



Chapter III. 



COTTON. 



The Commission for the Rationalisation of the Cotton Industry was established 
on October 7th, 1933, and consists of about twenty members, representing the interests 
of cotton-growers, merchants and manufacturers under the chairmanship of M. K. P. 
Chen, Director-General of the Shanghai Commercial and Savings Bank. Current 
business is directed by a standing committee of five. 

If China becomes an industrial nation, cotton weaving and spinning will probably 
be the most important of its industries. At present this industry is more heavily 
capitalised and employs more labour than any other of the growing industries. More- 
over, China, unlike Japan and the United Kingdom, can not only support a cotton 
industry, but can also produce the raw material. It possesses in eleven of its provinces 
all the natural characteristics suitable for cotton growing. Shansi, Honan, Hopei, 
Shantung and Kiangsu are the best areas ; Shensi, if irrigated, would also be admirably 
situated. 

The supply of cotton, however, is inadequate for the spindles of the Chinese 
cotton industry. In 1932, the import of raw cotton totalled $233 million, amounting 
to more than a quarter of China's visible adverse balance of trade. The industry needs 
at least 12 million piculs per annum, and with the increase in demand for cotton 

1 goods which must be anticipated with an increase in the prosperity of the farmer, 

this need will continually become greater. The reason for this unsatisfactory state 
of affairs is partly the low productivity per acre of Chinese cotton-growing districts, 
and partly the poor quality of the cotton ; both being due to the use of poor or 
degenerated seeds. As a result of a preliminary survey by the Cotton Commission, 
it has been established that the average production per mow with seeds most com- 
monly used is one-fifth of a picul. On the other hand, in the same soil, the output 
from improved types of seeds is four-fifths of a picul. The poor quality of the cotton 
grown from Chinese seed is an even more serious disadvantage than its small output. 
Manufacturers making anything but the coarsest of cloth are obliged to buy foreign 
cotton. 

If Chinese cotton-growers used a better seed, China would be exempt from the 
necessity of importing new cotton and therefore free to import machinery, or some 
commodity which it cannot at the moment itself produce. It is clear, therefore, that 
a Commission, charged with the improvement of the cotton industry in all its aspects, 
has, as its first task, the improvement of the quality of the seed. The Commission 
intends to effect this partly by an extension of the co-operative movement among 
cotton-growers. Co-operative societies are the most convenient media for the distri- 
bution of improved seeds to the farmers. They also secure for the cotton-grower 
attractive prices. Farmers will not grow cotton unless they can make a profit at least 
equal to that which they get for growing wheat or rice, and, in the market as at present 
organised, there is so long a chain of middlemen between the producer and the ultimate 



- 32 - 



purchaser that the price to the grower hardly covers cost of production. A beginning 
of a co-operative movement for the marketing of raw cotton has been made in the 
last two or three years by one of the Shanghai banks, and there are at present about 
10,000 members. The Commission hopes to extend this organisation very considerably. 

These co-operatives, besides assuring the cotton-grower of a higher price and thus 
stimulating production, will be used for improving the quality of the crop. One of 
the chief disadvantages of Chinese cotton is the unreliability of its quality. Chinese 
cotton is actually several dollars cheaper than American, but manufacturers are 
unwilling to purchase, because the cotton is frequently found to be adulterated, 
or mixed with sand or with wheat seed. The Cotton Commission proposes to attach 
to each co-operative society an officer who will grade and standardise the produce ; 
cotton which does not come up to a certain standard will be refused, and this is 
expected to have a controlling effect. 

Besides establishing this co-operative organisation, the Commission intends to 
establish at Nanking a central bureau for the improvement of cotton, and, in co- 
operation with the provincial bureaux of reconstruction, will set up similar institutions 
in five of the provinces. The business of these establishments will be to experiment 
with and propagate improved seeds, to collect statistics concerning the cotton crop, 
to study fertilisers and to conduct propaganda among cotton-growers with a view 
to giving them the technical knowledge which they lack. 

Its ultimate aim is the systematic control of the whole industry ; the organisation 
of the financial structure of individual enterprises, the replacement of obsolete 
machinery and the rationalisation of trading methods. Plans have been worked out 
for the erection of a special financial organisation for this purpose, but the contem- 
plated arrangements are still being actively studied. In the meanwhile, the Commission 
would subsidise and guide specialised training in three of the largest engineering 
colleges. Discussions are also taking place with the Academia Sinica in regard to 
facilities at the Academy's institutes for continuous industrial research into a series 
of specific problems. The Committee set up by the National Economic Council to 
advise on technical studies is being apprised of the results of these conversations, 
which are likely to materialise during the year. 

The Commission will thus, during its first and experimental year, confine itself 
chiefly to measures for improving the raw material. 



— 33 — 



Chapter IV. 



SILK. 



i. The falling-off in the export of silk is one of the most striking features of the 
Chinese economic situation. Although this decline is partly attributable to the world 
depression, it is probably also due to more particular causes, as is demonstrated by 
the fact that the export has declined more than proportionately to the total foreign 
trade. Between 1928 and 1933, the export of silk fell from $282 million to $93 million. 
In 1928, this represented nearly 20 per cent of China's total exports ; in 1933, it 
was only 15 per cent. The Chinese export of silk fell between 1928 and 1933 by 
67 per cent, and, since the world purchase (excluding purchases of artificial silk) 
did not fall off in the same degree, it is clear that China lost a part of its silk trade 
to other countries. The position is the more serious, inasmuch as China had natural 
advantages for sericiculture greater than those of any other country. An extended 
cultivation of silk would, moreover, provide the farming population of China with a 
surplus of production over consumption ; the lack of this surplus at present renders 
China a poor customer for industrial commodities. ■ 

2. M. Benito Mari, former Chairman of the Italian Association of Sericiculture, 
who, at the request of the Chinese Government, was sent to China at the nomination 
of the Economic Committee of the League at the end of 1932, has been conducting 
an investigation into the state of the silk industry. His enquiries extended over the 
provinces of Chekiang, Kiangsu, Kwangtung (in which province Canton is situated), 
Shantung and Szechuan, which lies far up the Yangtze valley in the remote west. 
M. Mari has made a number of reports, and last autumn embodied these in a composite 
one (see page 4). 



3. M. Mari attributes the decline of trade, apart from causes due to the world 
economic position, to a deterioration in the quality of silk produced, which has led 
old-established buyers to discontinue or diminish their purchases and transfer their 
custom elsewhere. Faulty methods of mulberry-tree cultivation ; the degeneration, 
due to improper selection, of the silkworm eggs ; primitive and haphazard rearing 
of silkworms, and their improper feeding ; the spoiling of cocoons in the drying 
process ; indifferent management of the filatures and the lack of favourable financial 
backing ; all have played their part in bringing about the present decay. One cause is 
especially potent. In the cocoon market, there is no attempt to grade the cocoons, 
good and bad alike being purchased by the filatures, and, in consequence, Chinese 
silk is of very variable quality. The deleterious effect of this upon the foreign market 
can scarcely be overstated. 



— 34 - 

4. M. Mari has made suggestions for the improvement of the industry in all its 
branches. The gist is given in the following paragraph, taken from page 9 of the report 
which he made last autumn : 

' The reconstruction of China's sericicultural industry is a task of great 
magnitude which can only be accomplished by degrees. Nothing can be done, 
however, without compulsory Government regulation of certain phases of silk 
production . . . The Chinese Government should establish a State monopoly 
for the control of everything pertaining to the cultivation of mulberry trees, 
to the preparation of silkworm eggs, to the rearing of silkworm and cocoons 
and to the price and sale of cocoons. On the other hand, silk reeling and the 
marketing of raw silk should be left to private initiative, at any rate until 
better understanding and agreement have been reached among reelers, which 
would make it possible to organise a single selling institution. Nevertheless, 
silk filatures should be assisted with technical advice and with instructions, which 
should, in some cases, be obligatory, and they should be given a commercial 
information service, while their working conditions and output should be subject 
to Government control." 

5. The improvement of Chinese sericiculture has for some years occupied the 
attention of various public bodies. In 1919, the foreign chambers of commerce at 
Shanghai, in collaboration with Chinese interests and since 1927 with the National 
Government, have maintained an institution called the International Committee for the 
Improvement of Sericiculture. This Committee has functioned principally in Chekiang 
and Kiangsu. The guiding principle governing its activity has been to improve 
the quality of Chinese silk, to reduce its price, and to make its quality uniform. 

In this connection, the Committee has established three stations in Kiangsu 
for the breeding of improved and uniform eggs. To disseminate these eggs, which 
are sold at cost price, it has established in Kiangsu and Chekiang a number of demon- 
stration stations, each having a staff trained by the Committee, which maintains at 
Chinkiang a school for this purpose. Stations are also prepared to give constant advice 
and aid to the farmer in the rearing of his silkworms ; to disinfect free of charge his 
house and implements ; and to assist him in the combating of disease and the pests 
which attack his mulberry trees. Since the most efficacious way to bring pressure 
on the farmer to improve his product is through the prices paid, the demonstrators 
offer their services to the purchaser of the cocoons in grading and valuing. This 
function has in some cases been taken over by co-operative societies, organised by the 
demonstration stations. 

6. When the situation of the silk industry became critical, the Government of 
Chekiang, in which province a substantial part of the farmer's income was derived 
from sericiculture, decided to intervene. In collaboration with the International 
Committee for the Improvement of Sericiculture, a new joint commission was formed, 
called the Kiangsu and Chekiang Sericiculture Uniformity Commission. This 
Commission, which received its supply of eggs and its staff from the International 
Committee, took over and extended the work formerly done by the Committee in 
Chekiang. 

A few details of the work of some of the stations established by the Commission 
may be of interest. 

In the Siaoshan district of Chekiang (declared, according to the terms above, a 
model area), nearly 120,000 sheets of eggs were distributed. Ten demonstration 
stations were established with forty-three demonstrators and the total expenditure 



r 



— 35 — 

was $11, 600. Several stations were set up for the collection of cocoons. In this district, 
more than 25,000 rearers sought the help of the stations ; over 17,000 houses were 
specially disinfected for sericiculture by demonstrators ; twenty-two co-operative 
societies were formed. 

In the Wuchow district of Chekiang, thirteen stations were erected, and twenty 
demonstrators employed. In the course of their operation, they disinfected more 
than 2,000 houses and formed twenty co-operative societies. 

In the Haiyen district, six stations were established with a staff of eight demon- 
strators and the silkworm rearing of nearly 1,000 farmers was supervised. 

7. One of the most disorganised processes of the industry is the collection of 
the cocoons for the filatures. M. Mari makes the following comments on this in his 
report (page 6) : 

" Strictly speaking, there is no organised cocoon market, as in Europe, on 
which the farmer can sell his products at competitive prices. The silk filatures 
decide in advance at what average price they will purchase cocoons from the 
farmers, and send out collectors who buy up the crops at a uniform price. The 
buying agents' technical knowledge is often negligible ; they are either unable 
or unwilling to distinguish good products from bad, while the farmer, aware 
that the price which he can obtain is not determined by the quality of his cocoons, 
does not take enough care of his rearings and sometimes keeps back the best 
part of his crop and hands over the worst to the collectors. The existence of 
this pernicious system very largely explains the farmer's indifference to improved 
methods of production." 

In August of last year, the Chekiang Government resolved to constitute itself, 
through the medium of the Sericiculture Improvement Commission attached to its 
Bureau of Reconstruction, the intermediary between the farmer and the filatures. 
All cocoon markets were asked to notify their requirements one month before the 
collection of the autumn crop. Their demands were then to be apportioned to the 
supply available. As the prices of cocoons had fallen sensationally in the course of 
the year, it is not possible to calculate exactly the difference between what the farmer 
received under this system and what he would have received under a free competitive 
system. But to a small extent he did undoubtedly benefit. 

8. During the last winter, the Central Government decided to include the 
rehabilitation of sericiculture as a part of the reconstruction programme. On January 
1st, 1934, the National Economic Council, under its power to create autonomous 
commissions for the control of industries, established such a Commission for the 
silk industry. Like the Cotton Control Commission, this consists of members repre- 
senting the different interests concerned. 

The Silk Commission has received an allotment of $750,000 from the budget 
of the National Economic Council. Since one of the chief causes of the decline of the 
silk trade is the poor quality of the egg, the Commission proposes to set up two 
stations, at a cost of $200,000, one in Chekiang and the other in Kiangsu (two of the 
most favourable areas for sericiculture), which will propagate improved varieties. 
It was proposed to extend this activity to Kwangtung, but funds do not allow. 
Eggs will, however, be distributed in Szechuan. These two stations will be in addition 
to the breeding stations of the other two commissions. The remainder of the allocation 



■ 



-36 - 

will be used for setting up demonstration stations (and, in time, model areas) upon 
the lines followed by the International Committee ; and in organising and buying 
machinery for silk factories created by the amalgamation of existing small units. 
Plans are now in process of elaboration. 

9. Another important action by the State in the regulation of the silk industry 
is the establishment of bureaux at the ports for the testing and grading of all silk to 
be exported. These bureaux exist at six principal ports. ■ It is expected that this 
measure should have important effects in two directions. In the first place, it should 
cause foreign purchasers to have greater confidence in Chinese silk ; and, in the second, 
it should stimulate the producer and lead him to pay closer attention to quality ; 
and he will thus become more willing to seek the aid of organisations established 
for his assistance. 



10. Besides this action by the National Economic Council, there has been a 
development of some interest in Szechuan. There the silk reelers, under the pressure 
of financial difficulties, were induced by local bankers to organise with Government 
assistance a co-operative society called the China Silk Corporation. Only one filature 
in the province does not now belong to the Corporation. This co-operative, the first 
of its kind in the silk industry, has not been in existence long enough for its value 
to be estimated ; it is possible, however, that by such combines the necessary economics 
will be introduced into the financial arrangements, the necessary efficiency into 
industrial management, and a greater strength into the marketing position, to enable 
China to recapture a part of its export trade. 



37 — 



Chapter V. 



WATER CONSERVANCY. 



i. Floods are perhaps the worst of the natural calamities which periodically 
afflict China. The country to the south of the Yangtze is mountainous, and the rivers 
in that territory give little trouble. But, in North China, the rivers, after taking their 
rise in the loess highlands of the north-west, flow across an immense plain before 
reaching the sea. In the course of centuries, having washed down great quantities 
of silt, they have formed beds which are higher than the surrounding country and can 
therefore only be kept from overflowing by means of dykes. In Central China, though 
there is nothing like the same quantity of silt carried by the Yangtze, the conditions 
are not dissimilar. The bed of the Yangtze is not deep enough to accommodate 
the water flowing into it after a period of abnormally heavy rainfall. Its tendency 
at such 3 time is therefore to spread over the whole of the neighbouring plain. 

2. In a country so situated, water conservancy work must necessarily be of 
interest to the Central Government, and, in the spring of 1931, the Chinese Government 
informed the Communications and Transit Section of the League that it intended to 
include certain hydraulic projects in a first programme of national development. 
Of these, the most important was a scheme for the improvement of the Hwai River. 
But the Government was anxious, before starting to carry out this scheme, to have 
the advice of engineers who had been engaged on work of a similar character elsewhere. 
It accordingly requested the Transit Organisation of the League to appoint a commis- 
sion to come to China and review the situation. At the same time, the Government 
announced that, in the event of such a commission being despatched, it would seek 
its advice on certain proposals connected with the port of Shanghai and with the 
rivers of North China. Another of the projects was for a station for the technical 
training of civil engineers, and for the organisation of this the Government also 
requested the aid of the League. 

3. One June 13th, 1931, the League's Advisory and Technical Committee for 
Communications and Transit accepted the invitation of the Chinese Government to 
collaborate in the work described. 

4. A commission of three engineers was accordingly despatched to China. 
It consisted of Mr. Coode, a member of the London Institute of Civil Engineers ; 
M. Perrier, Inspector-General of Roads and Bridges at Paris; and M. Sieveking, 
Director of the Hamburg Port Administration. The Commission arrived in China 
at the beginning of January 1932, and stayed about three months. The visit was 
under the auspices of the National Economic Council. The report of the Commission 
was addressed to the Communications and Transit Organisation of the League of 
Nations, which presented it in February 1933 to the National Economic Council. 



. 



- 38 - 

5. The peculiarity of the Hwai River, which lies between the Yangtze and the 
Yellow River and is one of the largest rivers in China, is that it has no clearly-defined 
outlet to the sea. In consequence there is a grave danger of flood whenever rain falls 
heavily in the upper reaches of the river. The Government, in planning action, had 
hesitated between two plans, one to make a new outlet to the Yellow Sea, the other 
to conduct the waters of the Hwai into the Yangtze. The Commission recommended 
the second of these courses. On the strength of its report a loan was obtained from the 
British Boxer Indemnity Fund, and work, estimated to cost about $14,000,000, has 
begun on the lines suggested by the Commission. 

Certain of its proposals are also being carried out on the rivers of North China. 
At Shanghai, the Commission considered a plan by the municipality of Greater 
Shanghai for building a dock between the city and the junction of the Whangpoo 
and the Yangtze. In this case, it expressed the opinion that, on technical grounds, 
the building of such a dock would be a mistake. 



6. Between the passing of the aforementioned resolution of the League 
Communications and Transit Committee in June 1931 and the arrival of the 
Commission of engineers in China in January 1932, there had occurred, in August 
and September 1931, the catastrophe of the Yangtze flood. The damage done is 
described as follows in the report of the Flood Relief Commission : 

" During the late summer months of 1931, 25,000,000 people, inhabiting 
an area of 70,000 square miles, were affected in various ways by the greatest 
flood in the history of China. Approximately 140,000 persons were drowned 
and a number which cannot be accurately ascertained, but which must be 
very large, lost their lives through other causes directly attributable to the flood. 
Forty per cent of the people in the affected regions were compelled to migrate 
for the greater part of winter. A crop worth $900,000,000 was lost, and a total 
loss of $2,000,000,000 was borne by a community whose average family earnings 
do not exceed $300 a year." 

The situation which resulted was so urgent that the special body called the 
National Flood Relief Commission was called into being to deal with it (see chapter I, 
paragraph 1). Besides work devoted to the relief of immediate distress, the National 
Flood Relief Commission undertook to repair and rebuild certain dykes on the 
Yangtze and its tributaries, and, in the course of its activities, built dykes to the 
length of over 7,000 kilometres. It is estimated that at one time over one million 
persons were engaged in dyke-building. Wages for this work were paid mostly in 
kind, out of a loan of 450,000 tons of wheat from the United States. Taking the 
price of a ton of wheat to be $74, wages represented a cost of $20,000,000. Other 
costs were only $2,000,000. In hydraulic matters, the attention of the National 
Economic Council was directed entirely to assisting the Flood Relief Commission. 



7. When the National Flood Relief Commission ceased to exist in the summer of 
1932, the National Economic Council was directed by the Government to take over 
its duties and the funds and material which the Commission still had in hand. The 
funds amounted to about $1,600,000 (this sum being included in the total 
shown in paragraph 7 of Chapter I). In November 1932, the National Economic 
Council was also instructed to take over the control of conservancy work in the 
Province of Hupeh. Between November 1932 and the beginning of 1934, the National 
Economic Council has been in receipt of funds for this work, derived chiefly from 
Customs, to the average monthly amount of $200,000. 



— 39 — 

8. To fulfil these duties, the National Economic Council formed a special 
Hydraulics Bureau, which was partly staffed by engineers taken over from the National 
Flood Relief Commission. The Bureau had at its disposal the services of M. F. J. M. 
Bourdrez, one of the representatives in China of the Transit Organisation. Four 
offices, organised on somewhat similar lines to the central bureau, were set up by the 
Bureau to take charge at the centres where the Flood Relief Commission had been 
making extensive operations. A committee was also formed of persons appointed 
by the Standing Committee of the National Economic Council for the purpose of 
exercising general supervision over the work of the Bureau. 

9. The work of the Bureau during the eighteen months of its existence was 
partly to complete the work of the Flood Relief Commission, and partly to carry 
out the conservancy work in Hupeh Province. This work consisted almost entirely 
of the repairing and strengthening of earth dykes along the Yangtze and Ffwai 
rivers and their tributaries. The total amount spent was $1,407,000. 

10. By December 1933, the programme drawn up when the National Economic 
Council took over from the Flood Relief Commission had been almost completely 
carried out and the funds available, except for the work in Hupeh, had been exhausted. 
All the work had been in the nature of an emergency programme. Flood prevention 
and the improvement of rivers is normally in the hands of three great conservancy 
commissions (situated at Tientsin, Shanghai and Canton) which derive their funds 
chiefly from shipping taxes and river dues, of river commissions supported by grants 
from the National Treasury and appointed by the National Government, and of 
provincial river bureaux. With the exception of the Whangpoo Conservancy 
Commission at Shanghai, which, in 1931, had an income of over $4,000,000, their 
incomes are comparatively small. None of them, either from a financial or adminis- 
trative point of view, was competent to take over the work of the Flood Relief 
Commission, and this in consequence devolved upon the National Economic Council, 
the only available national body. 

11. At the beginning of 1934, in drawing up the project for the year, the 
Standing Committee decided that it was time to determine what permanent part the 
National Economic Council should play in conservancy undertakings. But, before 
making its decision, it resolved to seek through the League the advice of a hydraulic 
engineer of international standing. 

It was understood that, as a result of this consultation, the projects would be 
selected upon which it would be advisable to concentrate in the immediate future. 
Arrangements have been made for a technical officer, commissioned by the National 
Economic Council, and M. Bourdrez to go to Europe this summer, taking with them 
detailed descriptions of the various projects, relevant maps and documents and 
records of observation work carried out both as a part of their routine by the hydro- 
logical research stations and also with special regard to the detailed schemes for 
improvement and river control. 

12. As these consultations will take time, the studies in China cannot begin 
before next autumn. In the meanwhile, the National Economic Council has decided 
to undertake irrigation work in connection with the assistance to be given to the 
provinces of the north-west. 

13. These provinces are liable to suffer from devastating drought. It is thought, 
however, that this drought can be averted by irrigation. There are three major 



40 — 



irrigation projects for the north-western provinces, two of which have already been 
partially carried out. The National Economic Council proposes to make subsidies 
totalling more than $1,000,000 for all these projects, and put its skilled engineers 
at the disposal of the provincial Government. A survey party, accompanied by 
M. Bourdrez, is at present in the district engaged on a study of the work to be under- 
taken in the course of the year. 

14. The observation of facts relating to rivers and the collection of hydrological 
data, essential for the planning of co-ordinated policy, is considered to be on an 
unsatisfactory basis. Data are collected by the River Commission, the provincial 
river bureaux and reconstruction bureaux, and by special institutions such as the 
Customs Marine Department, the Academia Sinica, the observatory of Ziccawei, 
the Hydrographical Department of the Ministry of the Navy, the Survey Bureau of 
the Ministry of War, and the hydraulic faculties of universities. As many of these 
institutions use different instruments and methods of calculation, their results are 
of little value. Nevertheless, for hydraulic work, information regarding climate, 
meteorology, watercourses, nature of soils, etc., is essential. The proposed irrigation 
work of the north-west is, for example, seriously hampered because no data have been 
collected in the past showing the need for water of different crops in the soil of that 
district. The technical secretariat of the National Economic Council is accordingly 
working out a plan for the co-ordination and supervision of research work, with a 
view to rendering it useful for the guidance of practical policy. 

15. The technical secretariat, in drawing up its project for work, has also felt 
the need for a laboratory for the conducting of tests. It is understood that a portion 
of the Dutch Boxer Indemnity Fund will be available for the building of such a labo- 
ratory, which, it is estimated, will cost less than $400,000. The laboratory will conduct 
the following studies : 

(a) Relations between current and velocities and silt deposits ; 

(b) Character of the different sediments ; 

(c) Most suitable cross-sections of dykes — seepage through dykes ; 

(d) The most suitable types of spur dykes or other training works in rivers, 
with special attention to the so-called permeable construction in rivers with high 
silt percentage ; 

(e) Protection of dyke surfaces ; 

(/) The roughness coefficient in the most important Chinese rivers. 

16. In the original plan for collaboration between the Chinese Government 
and the Transit Organisation of the League, mention was made of the establishment 
of a station for the field training of engineers, but this plan has not materialised. 



4i 



Chapter VI. 



ROADS. 



i. During the last five years, road construction by provincial Governments 
has considerably increased in pace. It is part of the general movement for moderni- 
sation which has swept over the whole country since 1925. It was realised that a 
system of communications was indispensable for ensuring security, administrative 
order and political unity. Within each province, it would render the business of local 
government easier, bring greater cohesion and help economic development by 
providing facilities for the passage of persons and goods. Modern means of communi- 
cation are indeed still very few. There are not more than 13,000 kilometres of railways 
in China, as compared with 77,000 kilometres in the U.S.S.R., 32,000 kilometres in 
British India, and 400,000 kilometres in the United States of America. This absence 
of railways is not compensated by a system of roads. Although there was once a 
fairly good system of courier highways, these were allowed, during the Manchu 
dynasty, to fall into disrepair. » Roads in rural China represent a network of small, 
picturesquely winding and narrow footpaths, and, since most transport is by donkey 
or wheelbarrow, or on the human back, these paths had been sufficient during centuries 
of Chinese history. 

2. When road-building began, construction was spontaneous and was carried 
out either by provincial Governments or by military commanders, and, as the 
programmes were not co-ordinated, they were in many cases wasteful. No Ministry 
undertook responsibility for roads, and thus the National Economic Council at its 
inception was led to organise a Roads Bureau. Its policy has been to co-operate with 
the provincial Governments and with private interests in order to stimulate, control 
and guide their activities by the grant of loans for roads the construction of which 
was considered desirable. The choice between the various systems of highways lies 
in the hands of the National Government, and is dictated by considerations of general 
policy and the interests of national defence. Consequently, a plan was drawn up in 
1932 for a system of highways, first for the three provinces of Kiangsu, Chekiang and 
Anhwei, and later in the year for these together with the adjacent provinces of 
Hupeh, Honan, Hunan and Kiangsi. The Roads Bureau prescribes the location, 
quality and kind of roads to be built, and, in selected cases, grants loans at low rates 
of interest to cover about 32 per cent — in some cases more- — of the building costs, 
placing at the disposal of the provincial authorities its advice and expert engineers. 
This policy resulted in a considerable acceleration in the process of construction, 
the roads built during the last two years with the help of the National Economic 
Council amounting to about 4,000 kilometres. 

In many cases, it was sufficient to construct short links between already existing 
systems in order to open up new territories, and, as a result of their comparatively 



1 The National Good Roads Association estimates that, in 1927, there were, in the whole 
of China, a little less than 30,000 kilometres of roadway. This is probably a considerable over- 
estimate, as it would not have been possible to drive a car along many of the roads. 



— 42 — 

modest construction cost, a connected system of more than 12,000 kilometres has been 
brought into existence. The following table shows the length of road now open in 
each of these provinces : 

Kilometres 

Kiangsu 2,416 

Chekiang 1,602 

Anhwei 2,092 

Kiangsi 2,224 

Hupeh 1,833 

Hunan x >398 

Honan 2,111 

13-676 

The average cost has been only a little over $6,000 per kilometre. The total 
amount of loans extended by the National Economic Council to provinces for rural 
reconstruction from May 1931 till April 1934 has been $3,982,000. 



3. It may not be out of place to repeat that the provinces did not need any 
persuasion to follow an active policy of road-building, of which the National Economic 
Council has no monopoly. The following table sbows the length of existing roads 
open to traffic (in kilometres) in each of the provinces in 1933 (figures of the Bureau 
of Roads, National Economic Council) : 



Kiangsu . 
Chekiang . 
Anhwei 
Kiangsi 
Hupeh . . 
Hunan . . 
Szechuan . 
Sikang . . 
Fukien 
Kwangtung 
Kwangsi . 



2,416 
1,602 
2,092 
2,224 

i,833 
1.398 
3.980 1 
575 l 
2.449 
10,700 a 

3.896 



Kweichow 

Yunnan . 

Hopei . . 

Shantung 

Shansi 

Honan 

Shensi . . 

Kansu 

Chinghai 

Liaoning 

Kirin . . 



1,165 

1.344 ! 

I.95 1 

6,885 

2,025 

2,111 

1,169 

637 

1. 173 
2,420 ' 
2,125 » 



Heilunghiang 
Jehol . . . 
Suiyuan . . 
Ninghsia 
Chahar . . 
Outer Mongol: 
Sinkiang . 
Tibet . . 



Total 



ia 



1,970 
2,330 

478 

2,550 
3.757 
3,176 
1,325 



71-756 



Even in the seven provinces comprised in the scheme mentioned above, the local 
Governments have completed many roads without the assistance, and sometimes 
even against the advice, of the National Economic Council. This unassisted road- 
building is sometimes in the ratio of 4 : 1, as was the case in the Province of Chekiang 
during the last two years. Outside the seven provinces, Shantung, Kwangtung 
and Kwangsi have been particularly active, having constructed between them over 
9,200 kilometres of roadway. 3 In many cases, what is returned officially as a road 
would not come up to the standards drawn up by the Roads Bureau of the National 
Economic Council, and is likely to be little better than a cart track, rapidly deterio- 
rating under even light traffic and unusable in time of heavy rainfall. 



1 From Chinese Economic Journal (August and September 1933). 

2 From Kwangtung Reconstruction Monthly Special Issue on Highways. 

3 Roads built in five provinces, 1931-33 : 

Kilometres 

Kwangtung 4,183 Fukien 

Shantung 3,693 Hopei 

Kwangsi 1,326 

The data from which this table is compiled are not wholly reliable. 



Kilometres 

1,062 

646 



— 43 — 

4. The Roads Bureau has three departments : (a) for transport, (b) for planning 
and investigation, (c) for engineering. It has established branch stations at the 
principal construction sites. It has drawn up regulations for traffic control, given 
short courses for highway engineering, has begun the establishment of a museum 
and a reference library, published a Chinese dictionary of road terms, and commenced 
the registration of highway engineers.. It has several sectors of an experimental 
road near Nanking, in order to determine the most appropriate form of road 
construction. 

5. The National Economic Council was not directed by the National 
Government to consider a general policy of communications for the country. In 
determining, however, the guiding principles for the policy of its Road Bureau, it 
starts from the assumption that railways, and in a lesser degree waterways, represent 
at present, and will of necessity represent in the near future, the main lines of 
communication. Roads are therefore considered as feeders of these main lines, and, 
in planning new construction, the advice is given that, as a general rule, they should 
be built to supplement and connect, and not to duplicate, the existing communications. 
When conditions permit, the starting of new railway construction on a more 
considerable scale than is possible at the moment, the present schemes will have to 
be adjusted accordingly. With the renewal of work on the Canton-Hankow Railway, 
the extension of the Lunghai Railway to the remote north-west, and the connecting 
up of Hunan and Chekiang by a railway along the lower reaches of the Yangtze, 
this period of railway construction appears to be close at hand. 

6. Furthermore, in planning a system of communications for a country, it is 
necessary to investigate what requires transportation. This depends on the 
geographical and economic situation. China is a country which has a preponderantly 
agricultural, and a very much smaller though steadily growing industrial, area. 
In the districts of Tientsin (population 1,319,000), Peiping (population 1,492,000), 
Shanghai (population 3,259,000), Nanking (population 672,000), Hankow (population 
746,000), and Canton with its hinterland (population over one million), * the develop- 
ment of motor-bus traffic run at a profit, and the building of garages, petrol-pumps 
and repair-stations, has been quite considerable during the last few years. 

The rest of the country is predominantly agricultural, the density of population 
varying to a very considerable degree from one area to another. The column 2 of the 
following table shows the population per square mile of the more important areas : 

Population in 1926) Population 

x Province (Post Office estimate) per square mile 

(000 's) 

Chekiang 24,140 657 

Kiangsu 34,624 896 

Anhwei 20,199 368 

Yangtze Valley Kiangsi 27,564 395 

Hupeh 28,617 400 

Honan 35.290 522 

Hunan 40.529 486 

Shantung 34.37° 6l 4 

Hopei 38.906 335 



1 Estimates given in the Statistical Monthly, the publication of the Directorate of Statistics, 
National Government of China. 



I 



— 44 — 

Population in 1926 Population 

Province (Post Office estimate) per square mile 

(ooo's) 

Kansu 17,223 59 

The north-west ! Shensi 7.423 228 

( Shansi 12,153 149 

1 Fukien 14.330 309 

The south Kwangtung 36,776 369 

I Kwangsi 12,258 159 

Szechuan 52,064 238 

Such parts of the country as the Hsien of Kiangning, Kiangsu and the plain 
of Chengtu in Szechuan resemble an extensive and thickly-populated urban area, 
rather than what may be assumed to be ordinary countryside. In these regions, 
there is either at present or likely to develop a considerable demand for, and an 
increase of, rapid means of transportation, probably by motor vehicles. 

In less congested areas, transport is needed predominantly for the conveyance 
of goods, and its type will be determined by the kind of commodity produced, taking 
into consideration the need or otherwise for speed, the weight and the bulk, while 
the principal factor will be cheapness. To the farmers in this country, accustomed 
as they are to slowness of means of transport, a speed of five miles per hour is satis- 
factory, and they do not as a rule feel the need of increasing it five times — i.e., to the 
average speed of motor transport. Until present times, such a differentiated system 
of communications suited in different regions to the different types of country has 
not been worked out in accordance with any preconceived plan or plans, but has rather 
followed local customs. Thus, except in the north, where horses and camels are used 
to a varying extent for draught purposes, the chief motive power in transport has 
been human labour and donkey and muleback transportation. 

7. A table prepared by the Bureau of Roads from statistics gathered in Kiangsu 
and other provinces of the comparative cost of transport is very illuminating. The 
types of load are classed according to their degree of bulk and perishability. 

Type of Freight rates 

transportation (per ton-kilometre) 

$ 

first-class cargo . 170 

second-class cargo : o.no 

third-class cargo 0.093 

fourth-class cargo 0.068 

fifth-class cargo 0.045 

sixth-class cargo 0.035 

i first-class cargo 0.521 

Motor-trucks second-class cargo 0.384 

( third-class cargo . 256 

Donkeys, mules and horses 0.20 — 0.30 

Camels 0.20 — 0.30 

Carts (animal-drawn) 0.08 — 0.20 

Wheelbarrows 0.18 — 0.20 

Junks 0.02 — 0.05 

Steamers and launches 0.02 — 0.12 



— 45 — 

The high cost of motor transport as compared in particular with railway transport 
calls for serious consideration. The cost of maintaining roads in good condition is 
an important factor, as also is the considerably longer life of railway rolling-stock 
as compared with that of motors, particularly in a country where motor transport 
is in its infancy. 

8. Furthermore, motor-cars are much beyond the means of by far the greater 
part of the population of the country, and it may perhaps be said that, in the provinces 
provided with motor roads, private cars are as rare as private railway carriages on 
European railways. Motor vehicles at present, with the exception of the [industrial 
areas and the principal cities, are owned and operated by corporations, either public 
or private. 

There are four kinds of such companies in existence. 

The first operates in towns, and as a rule with considerable profit, some of the 
routes being given free of charge to private enterprises. J 

The second kind exists where a railway terminus does not reach an important 
city or provincial capital. Such a case is, for instance, that of the 174 kilometres 
between Tungkwan, the terminal point of the Lunghai Railway, and Sianfu, over 
which there are more than 200 different enterprises in operation, the majority owning 
only one vehicle. 

The third kind comprises regular services for passenger traffic over long distances, 
not linked by railway, separating important centres of population, or intended to 
link up with far-distant railway systems, either within the country or outside its 
borders. The public motor services are organised in certain provinces like Hunan, 
with its 900-odd miles of motor roads, on the model of railways, with regular time- 
tables, stations at fixed intervals and road supervision. 

Table A shows a list of services operated in all the roads in the seven provinces 
(See page 47). 

The fourth kind comprises the services connecting industrial centres around 
some of the ports in the north with vast areas separated by sparsely populated regions 
or districts having these ports as their natural outlet for their produce. In the case 
of one such projected highway, it is calculated that the time may be reduced from the 
two to six months required by camel caravans to three to four weeks for regular 
motor-truck services. 

It may be assumed that the motor vehicles imported into China are, except for 
military purposes, used either in the industrial areas or for the motor-bus services 



1 Details are available of the municipal bus services of Greater Shanghai and Nanking. 

(1) There are two bus services in Nanking. The first, called the Kiangnan Company, has 
a capital of $200,000 and is privately owned. It began to operate in the autumn of 1933, having 
received a licence for ten years. Under the terms of this licence, it pays 3 per cent of its total 
monthly receipts into the Treasury. The company operates two services, and possesses thirty 
buses, which are of moderate quality, being chiefly second-hand trucks with coach-work locally 
constructed. The Company has not been in existence long enough for its financial prospects 
to become clear. The second company has a capital of $100,000, and operates sixteen buses, 
all of which are of a very inferior type. Besides paying a duty of $30 a month on each of the 
buses, the company has to pay 30 per cent of its total annual profit to the municipality. Since 
1 93 1, however, the company has been run at a loss. 

(2) There are five private bus companies in Greater Shanghai, four of which operate long- 
distance lines extending outside the city. All these companies report a profit. The tariff on the 
long-distance lines varies according to distance between 32 and 39 coppers. In 1932, the China 
Autobus Company of Chapei, which has twenty-five buses and operates exclusively inside the 
city, carried 3,100,000 passengers. 



-46 - 

described in Table A. Since no motor Vehicles are manufactured in China, the Customs 
returns showing the imports of vehicles give a clear indication of the growth of traffic. » 

The Customs did not, before 1929, differentiate between private motor-cars 
and freight trucks and buses. 



9. The fuel required for motor vehicles presents another problem of capital 
importance. Home-produced oil is not as yet commercially available. The price of 
imported petrol at seaports is 70 cents, which is 60 cents above cost price on the 
Pacific coast of the United States of America. The total importation during the five 
years 1928 to 1933 has been 143,519,000 American gallons. In the interior of the 
country, such figures as are available show that the cost is rising to $1.20 at Tungkwan 
and $6.00 at Liangchow in the north-west, which, together with the cost of lubricating- 
oil, makes the running cost of a car particularly heavy in relation to the economic 
standards of the population. 

On the other hand, plentiful supplies of coal are available in many provinces, 
both at the sea-coast and in the interior of the country. Accordingly, the extraction 
of fluid and gaseous fuel from coal has attracted attention, and the commercial 
possibilities as applied to the various types of home-extracted coal are now being 
tested. A sum of $100,000 has been earmarked in the budget of the National Economic 
Council for 1934 for studies of fuel to be undertaken by the National Geological 
Survey. 



1 v«r Number of cars uti^_*u» 

Year Commercial, Private Motorcycles 

!926 4,499 655 

1927 3,328 419 

1928 4,065 570 

1929 4.142 4.639 707 

I930 1.933 2,347 458 

1931 1,435 2,315 552 

1932 1,227 2,882 282 

Principal ports of entry : 

1927 1928 1929 1930 1931 1932 

Dairen 959 1,096 1,878 527 10 187 

Tientsin 657 299 976 514 179 204 

Kiaochao 248 168 333 179 116 98 

Hankow 88 438 144 142. 143 

Shanghai 1,104 1,661 3,777 1,866 2,097 2,523 

Amoy 52 23 289 135 153 132 

Canton 155 116 134 265 274 310 

Kowloon 56 91 25 154 222 302 

Principal countries of origin : 

1927 1928 1929 1930 1931 1932 

United States of America 1,105 1,600 3,527 1,332 1,541 2,811 

Canada 223 265 161 132 62 21 

United Kingdom . . . 249 225 392 233 229 886 

Japan* . 679 1,140 3,582 i,795 979 80 

France 191 180 225 203 172 108 

Hong-Kong 484 672 864 650 760 79 

* These are presumably re-exports from assembly plants established in Japan. 
These figures are supplied by the Roads Bureau of the National Economic Council. 
In connection with the above table, it is of interest to note that, since 1930, the tariff on 
commercial vehicles was put at 15 per cent and on private cars at 30 per cent. 






Table A. — Showing the Present Traffic Conditions of Central-Aid Roads 

in the Seven Provinces. 
Bureau of Public Roads, the National Economic Council of China. 





Route 


Section 


Autobus a voyageurs 
Passenger motor-buses 


Camions 
a marchandises 

Freight motor- 
buses 


Recettes 
mensuelles 

Av. monthly 
income 


Exploited par le 

Gouvernement ou 

par line 

Compagnie privee 

Operated by 
Government or 
private company- 




Province 


Nombre 
d'au- 
tobus 

Number 
of buses 


Nonibre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 


Tarif 

voyageurs 

Charges, 
passenger 


Nonibre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 


Tarif 
Tonnes- 

Kin. 

Charges 
ton-km. 


Voya- 
geurs 

Passen- 
gers 


Marchan- 
dises 

Freight 


Observations 
Remarks 


Kiangsu 


Nanking- 
Fukien 

Shanghai- \ 
Kwangsi 1 

Chinkiang- 

Shuyang 

Soochow- 

Kiangyin 

Nantung- 

Kanyu 

Shangliai- 
Liuho 

Kiating- 
Lotieu 

Chinking- 
Kuyung 


Nanking- 

Chekiang 

Shanghai- 

Minhong 

Minhong- 

Chekiang 

Chinkiang- 

Yangchow 

Wusih- 

Kiangyui 

Sinanchen- 

Panpu 

j 


30 

10 

9 

25 

14 
8 

34 
3 


22 
12 

18 

12 

- 1 

8 


so.o>5 

O.023 
0.042 
0.025 
O.048 

0.035 
0035 

0.030 


- 


$0.17 


S 12,000 

11,000 

20,000 
4.000 




Co. 

Co. 

Gouv. 
Govt. 

Co. 
Co. 
Co. 

Co. 

Co. 

Gouv. 
Govt. 


Ligne non ratta- 

chee aux routes 

construites avec 

l'aide des autori tes 

centrales 
This line does not 

belong to the 
central-aid roads 

Ligne non" ratta- 

chee aux routes 

construites avec 

l'aide des autori tes 

centrales 
This line does not 

belong to the 
central-aid roads 




Total 




133 


- 


- 


- 


- 


47,000 


- 


- 


- 





Hangchow- 

Changhing 


— 


18 


19 


0.026 


— 


— 


22,071 


— 


Gouv. 
Govt. 


— 




( 


Konzenchiao- 
Shan Ian miao 


16 


45 


0.034 


- 


- 


16,306 


- 


Gouv. 
Govt. 


- 




Nanking- 1 
Fukien c 


Siaoslian- 
Shaohing 


40 


28 


0.025 


- 


- 


47,320 


- 


Co. 


- 




1 


Shaohing- 
Tsaono-Cheng- 
hsien 


21 


- 


0.030 


- 


— ' 


- 


- 


Co. 


Construit par une 

Comp. d'autobus 

Constructed by 

bus co. 




Shanghai- ) 
Kwangsi 1 


Hangchow- 
Pinghu 
Chuhsien- 
Lanchi 


15 
10 


11 


0.026 
0.030 


— 


— 


6,612 


— 


Gouv. 
Govt. 

Co. 





Oieki.ii:,'. 


Hangchow- 1 

Hweichow * 


Hangchow- 

Yuhang 

Yuhang- 

Linan 


12 
12 


10 
10 


0.034 
0.034 


- 


- 


- 


- 


Gouv. 
Govt. 

Co. 


1'rccedemmen.t 

exploiter par une 

Comp. d'autobus 

Formerly 

operated by 

bus co. 




( 


l.inan- 
Changhwa 


5 


6 


0.028 


- 


- 


3.»39 


- 


Gouv. 
Govt. 


— 




Shuhsirn- 
Changshan 


- 


5 


- 


0.030 


- 


- 


- 


- 


Co. 


- 




Ningpo- 
Fenghwa 


- 


18 


40 


0.025 


- 


- 


21,256 




Co. 


Ligne non 

rattachee aux 

routes construites 

avec l'aide des 
autori tes centrales 
This line does not 

belong to the 
central-aid roads 




Total 


- 


172 


- 


- 


- 


- 


116,804 


- 


- 


- 



- 4 8 - 

Table A. — Showing the Present Traffic Conditions of Central-Aid Roads 
in the Seven Provinces (continued). 





Route 


Section 


Autobus a voyageurs 
Passenger motor-buses 


Camions 
a marchandises 

Freight motor- 
buses 


Recettes 
mensuelles 

Av. monthly 
income 


Exploitee par le 
Gouvernement ou 

par une 
L'onipagnie privee 

Operated by 
Government or 
private company 




Province 


Nombre 
d'au- 
tobus 

Number 
of buses 


Nombre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 


Tarif 

voyageurs 

Charges, 
passenger 


Nombre de 
courses par 

jour 

Frequency 

of 

operation 

(day) 








Observations 








Tonnes- 
Km. 

Charges 
ton-km. 


Voya- 
geurs 

Passen- 
gers 


Marchan- 
dises 

Freight 


Remarks 


Anhwei 


Nanking- 1 
Szechuen j 

Shangchiu- 

Kimen 

Nanking- 

Shensi 

Tienfow- 

Suinin^' 


Hofei- 

Kaohofow 

Kaohofow- 

Tsienshan 

Kaohofow- 

Ankiog 

Chaohsien- 

Hofei 

Liangyuan- 

Tienibw 


13 


6 

6 

* 
8 


0.040 
0.040 
0.040 
0.040 
0.040 


3 


0.25 

to 

0.56 

do 


5.5oo 
4,100 


S300 


Gouv. 
Govt. 
Gouv. 
Govt. 
Gouv. 
Govt. 
Gouv. 
Govt. 
Gouv. 
Govt. 


— 




TotaJ 


- 


22 


- 


- 


- 


- 


9,600 


- 


- 


- 


Kiangsi 


Kaifeng- ) 
Kwangtung \ 

Nanking- ) 
Kweiehow \ 

Shanghai- ) 
Kiangsi \ 

N'anchang- ) 
Nanfeng \ 


Nanchang- 
Cbusbancbiao 

Chushan- 
Cbiao-Kian 

Huangking- 
fow-Nanchang 

Nanchang- 
Shangkao 

Linchwan- 
Sbantuentu 
Yungfeng- 
Patu 

Kian-Anfu 

Nanchang- 
Ltncbwan 

Linchwan- 
Nanfeng 


=3 
3 

6 
12 

I 

3 
26 

»4 


Servicedirect „ 

Through 

Service local , 

Local 3 ° 

Servicedirect 

Through " 

Servicedirect 

Through 

Servicedirect , 

Through I0 

Service local „ 

Local 

Service direct <, 

Through 

Servicedirect , 

Through 

Servicedirect _ 

Through 

Servicedirect 

Through 3 ° 

Service local R 

Local 

Servicedirect 

Through 

Service local „ 

Local 


0.036 

0.036 
0.036 

0.036 

0.036 
0.036 
0.036 

0.036 
0.036 


- 


do 
do 

do 

do 
do 
do 

do 
do 


i,6oo 

1,500 
6,300 

13,000 


— 


Gouv. 
Govt. 

Gouv. 
Govt. 
Gouv. 
Govt. 

Gouv. 
Govt. 

Gouv. 
Govt. 
Gouv. 
Govt. 
Gouv. 
Govt. 

Gouv. 
Govt. 

Gouv. 
Govt. 


— 




2,000 

J 8, 000 

10,000 


- 


— 




Total 


- 


89 


- 


- 


- 


- 


52,600 


- 


- 


- 


Hupeh 


Nanking- 
Szechuen 

Loyang- 
Shiuchow 

Hwayuan- 
Francheng 

Hankow- 
Machang 


Hankow- 
Shayang 

Siangyang- 
Shasi 

Ensemble de 

la ligne 
Whole line 
Ensemble de 

la ligne 
Whole line 


to 
8 

35 
8 


Service direct 
Through 

Service diree't 
Through 

Indelerminee 
Not fixed 

Servicedirect 
Through 


0.034 
0.040 
0.040 
0.034 


2 
2 

15 
3 


0.45 

to 

0.20 

0.56 

to 

0.32 
0.56 

to 
0.32 

0.45 
to 
0.20 


6,600 

7,000 

20,000 

6,000 


2,100 

700 

20,000 

3,000 


Gouv. 
Govt. 

Gouv. 
Govt. 

Gouv. 
Govt. 

Gouv. 
Govt. 


- 




Total 


- 


5 1 


- 


- 


- 


39,600 


- 


- 



— 49 



Table A. — Showing the Present Traffic Conditions of Central-Aid Roads 
in the Seven Provinces (continued). 



Autobus a voyageurs 
Passenger motor-buses 



Nornbre 
d'au- 
tobus 

Number 
of buses 



Nombre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 



Camions 
a marchandises 



Freight motor- 
buses 



Tarif 

voyageurs 

Charges, 
passenger 



Nombre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 



Tarif 

Tonnes- 

Km. 

Charges 
ton-km. 



Recettes 

mensuelles 

Av. monthly 
income 



Voya- 
geurs 

Passen- 
gers 



March an- 
dises 

Freight 



Exploiters par le 
Gouvemement ou 
par une 

Compagnie privee 

Operated by 
Government or 
private company 



Observations 
Remarks 



Hunan 



Nanking- 
Kweichow 



Loyang- 
Sbiuchow 



Sbanhai- 
Kiangsi 



Changteh- 
Yuyang 



Total 



Changsha- 
Yunganshih- 

Kacchiao 



Siangtan- 
Shaoyang 



Cbangsba- 
Changteh 



Changsha- 
Hengyang 



Hengyang- 
Ichang 



Liling- 

Chaling 



Chang teh- 
Taoyuan 



24 



»7 



147 



Service direct 
Through 10 
Service local , 
Local ° 

Service direct 
Through 
Service local 
Local 
Service direct 
Through 
Service local 
Local 25 

Service direct 

15 



29 



25 



Through 
Service local 
Local 



Service direct 
Through ^ 

Service local , 
Local 



Service direct 
Through 
Service local 
Local 



j 6 



Service direct 
Through 3 

Service local 
Local 



0.0278 



0.03654 



0.0298 



0.0331 



0.0292 



0.0292 



27 

-\i 



- 


13,657 


- 


0.2936 


43,107 


38,953 


0.2936 


19.532 


501 


0.2936 


40,031 


689 


0.2936 


20,810 


8,452 


- 


12.314 


- 


- 


7,864 


- 


- 


157,315 


- 



Gouv. 

Govt. 



Gouv. 

Govt. 



Gouv. 
Govt. 



Gouv. 
Govt. 



Gouv. 
Govt. 



Gouv. 
Govt. 



Gouv. 
Govt. 



La sect, de Lilling 

a Yuhsien n'est 

pas rattachee aux 

routes construites 

avec l'aide des 
autorites centrales 
The section from 
Liling to Yuhsien 
does not belong to 
the central-aid 
roads 

Ligne non 

rattachee aux 

routes construites 

avec l'assistance 

des 
autorites centrales 
This line does not 

belong to the 
central-aid roads 



— 5<> 



Table A. — Showing the Present Traffic Conditions of Central-Aid Roads 
in the Seven Provinces (continued). 





Route 


Section 


Autobus a voyageurs 
Passenger motor-buses 


Camions 
a marchandises 

Freight motor- 
buses 


Recettes 
mensuelles 

Av. monthly 
income 


Exploited par le 
Gouvemement ou 

par uiie 
Compagnie privee 

Operated by 
Government or 
private company 




Province 


Nombre 
d'au- 
tobus 

Number 
of buses 


Nombre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 


Tarif 
voyageurs 

Charges, 
passenger 


Nombre de 

courses par 

jour 

Frequency 

of 

operation 

(day) 


Tarif 

Tonnes- 

Km. 

Charges 
ton-km. 


Voya- 
geurs 

Passen- 
gers 


Marchan- 
dises 

Freight 


Observations 
Remarks 


Honan 


Kaifeng- 
Kwangtung 

Nanking- 
Sbensi 

Hwangchwan- 
Kingfuhsien 

Linyu- 
Taiho 

Kaifeng 
Tsaochow 

Nanking- 
Chowkiakow 
Line Hwai- 
Yang-Pobsien 


Kaifeng- 
Siangcbeng 

Hwangchwan- 
Sinyang 

Hwangchwan- 
Popiho 

Yuhsien- 
Cbowkiakow 

Nanyang- 
Luyi 


6 

8 

4 

6 
18 


Service direct 
Through 4 
Service local 
Local 

Service direct , 
Through ° 
Service local .- 
Local 

Service direct 
Through * 
Service local 
Local z 

Service local . - 
Local " 


0.040 
0.030 
0.050 
0.040 
0.040 
0.040 


'- 


- 


3,500 
5,000 
2,000 

12,000 
8,000 

10,000 


- 


Gouv. 
Govt. 

Sous le 
controle militaire 

Under 
military control 

Sous le 
controle militaire 

Under 
military control 

Gouv. 
Govt. 

Gouv. 
Govt. 

Gouv. 
Govt. 


- 




Total 


- 


54 


- 


- 


- 


- 


40,500 


- 


- 


- 


Total general 
Grand total 


- 


667 


- 


- 


- 


- 


463,419 


- 


- 


- 



The following table is an analysis of operating revenue and expenses of bus services in Chekiang 
Province : 

(1) Ticket fare, 25-28 cents per passenger-kilometre. 

(2) Bus capacity, 17-26 persons. 

(3) Operation revenue, about 28 cents per bus-kilometre. 

(4) Operation expense, 22 cents per bus-kilometre distributed into the following items : 

General overhead expenses 7.0 

Bus and station service 30.5 

Petrol 31 .0 

Engine oil 3.5 

Tyres and tubes 10.5 

Upkeep and repairing of vehicles 8.5 

Depreciation of vehicles 1.5 

Road maintenance 4.0 

Bonus 3.5 

Total 100. o 



r 



— 51 — 

10. As the cost of motor transport must be a factor determining its more 
extensive use in the country, the need for the standardisation of types of vehicle 

1 and for experimenting with the various kinds of engines is clear, and also the interest 

taken in experimenting with various kinds of motor-engines to discover the types 
best adapted to the needs of the country. 

There are many considerations involved, one of which is that different kinds of 
vehicles require different types of road. Most of the roads constructed are light roads, 
some of them, particularly in the north, being easily damaged by the wheels of the old- 
type horse-carts. This has led to a movement, now happily abandoned, to prohibit the 
use of roads to all but motor-cars. But to build roads suited to fairly heavy or very 
heavy trucks requires a considerable capital outlay and a heavy maintenance cost. 
In view of all these considerations, certain of the provinces — e.g., Kwangsi, one of 
the southern areas and one of the first to push forward with road-building — have 
regretted that railways were not built when the movement was initiated, and seriously 
considered the possibility of running horse-drawn coaches on the roads so as to 
stimulate traffic, now restricted to a very few cars, which are rapidly deteriorating. 
The need for horse-drawn vehicles is being emphasised by several provinces, including 
those of the north-west, where horses are available. 

The Roads Bureau has included in its programme for 1934 the study of the 
various types of vehicles — mechanically propelled, horse-drawn, and also adapted 
to the possibilities of human traction assisted by mechanical devices. 

11. The road-building programme of the National Economic Council for 1934 
is as follows : 

The Seven Provinces Highway Scheme described above is to be continued, and, 
as a result of the road-building operations scheduled for the year, some 4,800 kilo- 
metres of motor-road will be incorporated into the inter-provincial highway system. 
A start is also to be made in extending this system to other provinces, and in 1934 
it is proposed for this purpose to build 691 kilometres of highway. Roads will also 
be built in Shensi and Kansu in connection with the programme for rehabilitation 
of the north-west. One of these is the Lanchow-Kulang section of the Lanchow- 

TSuchow route and another the Sian-Hanchung route. It is proposed also to complete 
the improvement of the highway between Sian and Lanchow. In view of the general 
importance of this highway, the National Economic Council has made arrangements 
with the two provinces for operating a bus service between Sianfu and Lanchow, 
and an appropriation has been set aside for the purpose in the budget. This road, 
stretching from Sianfu, the capital of Shensi, and Lanchow, the capital of Kansu, 
represents an important sector of an historic highway connecting Central China with 
the populous areas of Central Asia and beyond. It is along this route that the silk 
caravans were despatched to Asia Minor for trade with the Western world. 

Owing to the distressed state of the province, it is proposed that the Council 
should, in this case, depart from its usual custom of lending 40 per cent of the cost 
of road construction and should itself bear all the expense. 

It is intended that the National Economic Council should co-operate with the 
provincial Governments in the appointment of the principal officer in a province in 
charge of road maintenance. The National Economic Council agrees to pay a part of 
the salary of these officers and proposes to make appropriations in the budget accord- 
ingly. Offices for supervising the construction of the inter-provincial highway are 
also being maintained by the National Economic Council in the Provinces of Hupeh 
and Kiangsi. 

The plan of railway extension contemplates the prolongation in some distant future 
of the Lunghai railway so as to connect with the Central Asiatic railway system, and 



— 52 



through it with Europe. But the intervening gap runs into thousands of miles, and 
motor- vehicle services will no doubt be in operation long before the railway link is 
finally completed. 

From January 1932, the Roads Bureau had at its disposal in its technical work 
the services of a representative of the Communications and Transit Organisation 
of the League, in the person of M. M. S. Okecki, Ministerial Adviser to the Ministry 
of Public Works at Warsaw. 

12. The co-operation of the Communications and Transit Organisation for 1934 
is contemplated in the study of the main problems set forth by the Roads Bureau, 
the importance of which has been pointed out above. These include : (a) the best 
type of roads adapted to selected areas ; (b) methods of operating the roads ; 
(c) questions of fuel supplies ; (d) type of vehicles and engines. The relevant technical 
documentation will be brought to Geneva by the Chinese delegation to the International 
Road Congress, and the members of this delegation will examine, with the members 
of the Technical Committees or individual specialists invited by the Transit 
Organisation, the several questions under investigation. Such a study would precede 
the despatch to China of such experts with an international experience as it may 
in consultation be found advisable to invite to visit China during next autumn. 

On the other hand, the Communications and Transit Section will be requested 
to arrange facilities at various technical institutes and establishments for experimental 
study by Chinese engineers, specially commissioned for the purpose, of several 
questions arising out of the general problem set out above, particularly in regard 
to fuels and engines. 






53 — 



Table B. — Automobile Census of China as at January ist, 1933. 
Compiled by A. Viola Smith, Trade Commissioner, United States Department of Commerce, Shanghai. 



1 



District 



Passenger cars 



1933 



Motor-buses 



Anhwei Province 

Anking, Tungchang, Chien- 
shan and Taihu 

Pochow and vicinity 

Wuhu, Ningkwo, Taising. . 

Hsu Hsien, Lingpi Hsien 
and Sgi Hsien 

Hopei Hsien (Luchow) . . . 

Shucheng 

Charhar Province 

Dolonnor 

Hsuanhua 

Kalgan 

Chekiang Province 

Fukien Province : 

Amoy City 

Outside Amoy 

Foochow City 

Outside Foochow 

Hong-Kong 

Honan Province 



Hopei Province : 

Paoting and other areas. 

Peiping City 

Outside Peiping 

Tientsin City 

Hunan Province 

Hupeh Province : 

Hankow City 

Other areas 

Jehol Province 

Kaiisu Province 



Kiangsi Province 

Kiangsu Province : 

Northern Kiangsu 

Tungchow and Hainien dis- 
tricts 

Tai Hsien and Tai Hsing- 

Hsien 

Shaopeh, Tsingkiangpu, 

Sukicn, Haichow 

Southern Kiangsu : 

Nanking City 

Nanking unregistered 

military cars 

Chinkiang and vicinity . . 
Shanghai area : 

Chinese Municipality. . . 
French Concession 



Carried forward , 



240 
40 

63 

18 

2,305 
40 

28 
1,808 

1,700 

4 

552 

18 

12 



7 
36 



250 
10 

27 
820 

339 

47 
4.750 1 



13. *3 2 



25 



4 
8 

2 it) 



52 
Q8 

76 

2,086 

J 7 

19 

i.4!5 

300 

1,740 

3 

415 

30 
10 

13 



1,150 
550 



12 

3.849 



13.094 



23 
10 

6 
20 
nil 

32 



320 

287 
37 

288 

175 
"3 

61 

87 

100 

285 



116 

8 

15 
121 



13 

50 



37 

5i 
36 



2,305 



1932 



65 



59 
349 

14 

247 

320 

170 

45 

6 

50 

10 

100 

142 



120 
40 

82 



65 



45 



107 
36 



2,257 



Motor-trucks 



1933 



3 
IO 



IO 

IO 
8l 



70 

35 

6 

6 

656 

1 1 

40 
39 

70 

7 

120 

4 

45 

17 

39 



2 
270 



18 

39 
I.430 1 



3.042 



1932 



Motor-cycles 



1933 



1932 



Total 



1933 



SO 



36 
58 

4 
590 
109 



3D 

75 
33 



100 

Included 

in buses 

II 



550 



375 



26 

866 



3.!6o 



nil 
nil 

nil 

nil 



17 



15 

334 



2 
47 

120 
3 

14 
1 



9 

4 

3 

65 



16 
149 



821 



nil 



50 

6 
4 

15 
415 



5 
115 

4 

10 



1 

1 

15 



15 
50 

16 
117 



956 



28 

IO 

12 

6 

40 

11 

120 



<H7 

100 
287 
106 
327 
3,470 
164 

131 
1,981 

1,990 
299 

686 

139 

65 

39 

199 



261 

14 

45 

1,205 

400 

153 
6,365 



19,300 



140 



11 

4 

67 

717 

108 
407 

415 

3.261 

181 

25 

i,535 

3i5 

2,030 

182 

726 

250 
5i 

107 

1,630 



1,585 
600 



161 

4,868 



19,376 



1 Excepting certain cases of duplicate registration. 

' A total oi 283 military and naval vehicles are operating in the International Settlement. No details are available as to categories : thus, figures 
arc arbitrary estimates. 



— 54 — 
Table B. — Automobile Census of China as at January ist, 1933. (Continuation). 



District 



Passenger cars 



1933 



Brought forward 



International Settlement 
Military vehicles, unre- 
gistered 

Kwangsi Province 

Kwangtung Leased Territory : 

Dairen City 

Outside areas 

Unregistered military 
trucks 

Kwangchow-Wan French : 

Leased Territory 

Kwangtung Province : 

Canton City 

Hainan Island 

Swatow City 

Outside Swatow area 

Other areas 



Kweichow Province 

Macao : Portuguese Colony. . 
Manchuria (exclusive of 

Jehol) : 

Harbin district (North 
Manchuria) 

Mukden district (South 
and Central Manchuria) . 

Mongolia 

Ninghsia Province 

Shansi Province 

Taiyuanfu 

Tatung 

Other districts 

Shantung Province : 

Chefoo Consular district . . 

Tsinan Consular district , . 

Tsingtao Consular district . 

Wei-hai-wei district 

Shensi Province 

Sinkiang Province 

Suiyuan Province 

Hsipaotou 

Kweihua 

Other districts 

Szechuan Province 

Yunnan Province 

Yunnanf u 

Outside areas 



Grand Total 



13.132 
6.395 1 

33 

117 

527 
223 



76 

1.405 
439 

27 
12 

573 

1 

195 



1.300 

1,880 
3 

40 



24 

199 

651 
16 

2 

10 

15 



164 
9 



27.473 



193* 



Motor-buses 



1933 



13.094 
6,l62 

50 

77 
733 



76 

1,207 

410 

58 

10 

400 
195 



2,070 
L557 



50 
63 
50 

43 

191 
600 

See Chefoo 

24 

I 

I 

3 
66 

151 
8 



27.35o 



2,305 
164 

79 

69 
13 



3i 

195 

47 

8 

93 
3i 
66 

50 



750 

150 

5 

25 

242 



10 
209 
104 

30 

188 



27 



2«2 

8 



5,190 



193a 



Motor-trucks 



1933 



2,257 
120 



67 



20 

"5 
47 

12 

73 
3i 
50 
50 



1,616 
264 

25 

150 
25 
50 

4 
257 
102 

See Chefoo 
199 



3 

80 

170 
8 



193s 



5,894 



3.042 
1,823 

200 

34 

208 
169 

1,000 



180 
178 

5 

6 

296 



3,160 
1,815 

150 

14 

330 



180 

178 

6 

19 
169 

Included in buses 

5 5 



95 

1,200 
37 

168 



46 

142 



130 

L730 



72 

23 
128 



Included in buses 



40 

n 



15 
20 



8,939 



43 



78 
25 



8,259 



Motor-cycles 



>933 



821 
782 

50 

4 

120 

355 



J 54 
2 

3 
1 

73 
35 



50 
250 

10 



6 

6 

112 

3 



17 
5 



2,860 



1932 



956 
804 

50 

7 

475 



150 

2 

15 
2 

63 
35 



50 

75 



23 
6 

95 



15 
3 



2,75i 



Total 



1933 



19,300 
9,164 

283 

234 

1,684 

1,000 

112 

i,934 
666 

43 
112 

973 
67 

285 



2,195 

3.48o 

45 

25 

460 



48 

460 

1,009 

49 
190 

50 
53 



478 
42 



44,462 



1932 



19,376 
8,901 

250 
185 

1.605 

101 

1,652 

637 

91 

104 

663 

50 
285 

3,866 
3,626 

25 

200 

88 

103 

477 
925 

235 

44 

13 

6 

146 

414 

44 



44,254 



Excepting certain cases of duplicate registration. 



* A total of a8S military and naval vehicles are operating in the International Settlement. No details are available as to categories : thus, figures 
arc arbitrarv estimates. 



— 55 — 



Tableau C. — Evaluation des frais de construction des routes interprovinciales dans 

LES SEPT PROVINCES. 

Table C. — Estimated Cost of Construction of the Inter-Provincial Highways in the 

Seven Provinces. 



Province 



Longueur a construire 
Length to be constructed 

(km.) 



Evaluation des frais de 

construction 

(non compris les travaux 

de terrassement) 

Estimated cost of 

construction 

(excluding earthwork) 



Soromc (levant £tre 
foumie par le Conseil 

Amount to be extended 
by the Council 



Kiangsu 

Chekiang 

Anhwei 

Kiangsi 

Hupeh 

Hunan 

Honan 

Credits — Provision Fund 



Total general — Grand total 



349 
798 
414 
,399 
594 
303 
384 



4,241 



1,872,400 
4,229,000 
1,705,600 
2,831,900 
2,370,900 
1,074,900 
1,396,400 



15,481,100 



I 
621,000 
1,258,000 
487,200 
962,800 
888,400 
430,000 
438,600 
414,000 



5,500,000 



1 



Tableau D. — Evaluation des frais de construction des routes interprovinciales dans 

d'autres provinces pour l'annee 1934. 

Table D. — Estimated Cost of Construction of the Inter-Provincial Highways in Other 

Provinces for the Year 1934. 













Evaluation des 














frais de 














construction (non 


Sommes devant 






Longueur 




Cout 


compris les 


etre avancees 






en km. 


Nature des travaux 


par km. 


travaux de 


par le Conseil 


Route 


Section 


Length 


Description of work 


Cost 


terrassement) 


Amount of loans 






in km. 




per km. 


Estimated cost of 

construction 

(excluding 

earthwork) 


to be extended 
by the Council 


Nanping- 

Kianshan .... 


* Nanping- 
Fengling 


234 


Infrastructure, 
ponts et ponceau x 

Roadbed, bridges 
and culverts 


% 

3,60O 


% 
842,400 


% 

337.00° 


Lishui- 


* Kienou- 




Infrastructure, 










Patu 


137 


ponts et ponceaux 
Roadbed, bridges 
and culverts 


3,600 


493,200 


197,300 


Nanping- 

Changting .... 


Nanping- 

Changting 


320 


Infrastructure, 

ponts et ponceaux 

Roadbed, bridges 

and culverts 


3.600 


1,152,000 


460,800 


Credits — Provi- 














sion Fund .... 




— 


— 





— 


304,900 


Total gen6ral — 














Grand Total . . 




69I 




""* 


2,487,600 


1,300,000 



Nota : Pour revaluation des frais de construction des sections de la province de Chekiang concer- 
nant les lignes marquees d'un asterisque, voir Tableau C. 

Note : The estimated construction costs of the sections in Chekiang Province for the lines marked 
with an asterisk are included in Table C, 



56 - 



Tableau E. — Evaluation des frais de construction des principales routes des 

PROVINCES DU NORD-OUEST. 



Table E. 



Estimated Cost of Construction of the Important Highways in the North- 
western Provinces. 











Coiit 


Cout total 


Route 


Section 


Longueur 
Length 


Nature des travaux 
Description of work 


par km. 
Cost 


de construction 
Total cost 






(km.) 




per km. 


of construction 


Sian-Lanchow . . . 


Sian-Lanchow . . 


780 


Travaux d 'amelioration 
Improvement works 


$ 
500 


390,000 


Lanchow-Suchow 


Lane how- Kulang 


200 


Infrastructure, ponts et 

ponceaux 

Roadbed, bridges and culverts 


i,5°° 


300,000 




Sian-Chikiachai 


I50 


Infrastructure, ponts et 

ponceaux 

Roadbed, bridges and culverts 


800 


120,000 


! 

Sian-Hanchung 


1 

Chikiachai- 
Hanchung 


300 


et autres travaux d'am6- 

lioration 

and other improvement works 

Infrastructures, ponts et 

ponceaux 

Roadbed, bridges and culverts 


2,500 


750,000 


Total general — 
Grand total . . . 




I.430 




— 


1,560,000 



Tableau F. — Evaluation des frais de construction pour les travaux d'amelioration 

DE SURFACE DES PRINCIPALES ROUTES POUR L'ANNEE 1934- 

Table F. — Estimated Costs of Construction for the Improvement of Road Surface 
on Important Highways for the Year 1934. 



Designation des routes 
Name of highways 


Section 


Longueur 
Length 

(km.) 


Evaluation des frais 
d'amelioration 

Estimated cost 
of improvement 


Sommes devant 
etre avancees 
par le Conseil 

Amount of loans 
to be extended 
by the Council < 


Nanking-Hangchow 1 

Shanghai-Hangchow 

! 


Kujung-Livaug 

Ishing-Tungtang 

Minhang- 

Kinszenianchiao 
Kinszenianchiao- 
Chapu 


105 

46 

21 


113.930 

220,000 
100,000 


1 
50,000 

100,000 
50,000 


Total general — Grand total 




172 


433.930 


200,000 



— 57 — 

Chapter VII. 
HEALTH. 



i. In April 1931, a programme for the development of the Central Health 
Service during a period of three years was drawn up by the National Health Adminis- 
tration and communicated to the League's Health Committee in May 1931. It formed 
the basis of active and continuous co-operation between the National Service and the 
International Organisation. 

The essentials of the three-year plan consisted of : 

(a) The establishment of the Central Field Health Station and the develop- 
, ment of the Central Hospital as a nucleus of the National Medical and Health 

Services, this station to operate within selected regions with regard to all major 
problems of sanitation, preventive medicine and medical relief ; 

(b) The creation of an Experimental Medical School and the enforcement 
of the few existing national medical colleges of the higher type for the training 
of suitable officers for later work ; 

(c) The gradual extension of the National Quarantine Service ; 

(d) The co-ordination of the various modern centres of public health 
activities in the country. 

2. As the three-year period terminates at the end of this month, the manner 
in which the programme was carried out may now be examined. 

A. The Central Field Health Station began to operate in temporary quarters 
from May 1931. For its work to be efficient, a competent staff and adequate material 
and laboratory facilities were required. Training was given in practical matters of 
public health, of epidemic control, of sanitary engineering, midwifery and nursing 
to thirty-four medical officers, sixty-four sanitary inspectors, some hundred midwives 
and fifty nurses. The work that awaited them was more than could be coped with. 
The Yangtze flood of 1931, the cholera epidemic of 1932 which spread to 300 cities 
in twenty provinces, Red Cross work during the period of hostilities, as well as 
increasing demands for organisers from provinces and municipalities, absorbed the 
personnel as soon as it was available. Up to the end of 1933, the League gave facilities 
to twenty-five members of the station and the affiliated organisations for study 
abroad qualifying them for teaching and directing responsible posts after their return 
home. 

The production of vaccines and sera was developed in Peiping and Nanking, 
the output being 25,000 litres of an approximate market value of $1,000,000. Essential 
drugs were produced at the headquarters in Nanking for public hospitals and 
dispensaries to the value of $100,000. 

Plague, malaria and parasitic diseases were taken as subjects for careful study 
at specially equipped departments and field stations at headquarters and in eight 
provinces and thirty-five localities (in Chekiang, Kiangsu, Honan, Shensi, Hupeh, 
Anhwei, Hopei and Shantung). Health centres were established at twenty places 



- 58 



in six provinces. Midwifery schools and maternity centres were opened at ten places 
in seven provinces. A special workshop was rapidly built for the mass production 
of health propaganda exhibits, of which 1,315,000 were produced to the value of 
$82,000. 

Adequate laboratory facilities were provided in the new building. The detailed 
elaboration of its plans had taken almost a year, and the construction another twelve 
months. The building, which compares favourably with any of this type, was 
completed in August 1933, and by October of the same year all its parts were in 
full operation. The total cost of the building and equipment was about $600,000. 

B. The Central Hospital was started in temporary wooden buildings in January 

1930. The plans for the permanent building were finally approved in the spring of 

1931. The construction started in September 1931, and in spite of four months' 
interruption during the Japanese war in 1932, the new imposing building was 
completed and the new clinics opened in June 1933. It has a capacity of 340 beds, a 
large out-patient department, and a centralised operating section. During 1933, 
71,527 out-patients and 5,347 in-patients (making 77,645 hospital days) were 
attended and 3,220 surgical operations performed. A School of Nursing and a 
Central Midwifery School are attached to the hospital. Through a system of 
interneship, 108 young doctors were trained for service in public hospitals and 
clinics. The total cost of the hospital, including equipment, was $1,200,000. 

C. The Quarantine Services which were inaugurated in July 1930, following 
consultations arranged by the League with a special international committee 
representing the Public Health services of the chief maritime countries and delegates 
of the International Chambers of Shipping, had operated in 1931 in six ports with a 
technical staff composed of nineteen officers. At present, the volume of the work at 
Shanghai, Wuhan, Amoy, Takutangku, Tientsin and Chingwangtao has greatly 
increased and the service expanded to twenty-four trained officers, of whom seven 
had benefited from facilities offered by the League at various ports in adjacent regions, 
and also in Europe and the United States. 

D. The participation in field activities in the country is manifested by public 
health work in nine provinces and thirty-five localities. 

The Central Field Health Station had to undertake also the preparation of sera 
and vaccines for the control of animal disease in response to urgent demands from the 
north-western provinces, which, in the last two years, suffered the loss of 2,500,000 
head of cattle and sheep. 

Financial stringency prevented the creation of the new medical school and active 
measures for the improvement of medical education. 

The headquarters and field work is being carried out on a modest annual appro- 
priation of $500,000. The Health Service participates in the work of other branches 
of the National Economic Council. Thus it ensures medical and epidemiological 
supervision in connection with road-building and relief measures. But, above all, 
it performs a truly pioneering service in rural districts, where the need of its manifold 
activities is felt more acutely than in many other countries. Where constructive 
rural rehabilitation encounters grave political, administrative and financial difficulties 
for its realisation, the health and maternity centre, the welfare of the child, the centre 
of contagious disease and medical relief can be and are brought into play rapidly, 
efficiently, and economically by a devoted and competent staff. 

Dr. B. Borcic continues to be closely associated with the technical activity of the 
central station. Dr. Stampar's inspiring field surveys give new significance to the 
conception of rural reconstruction, and meet with particular appreciation from the 
leaders of the National Economic Council. 



— 59 — 

Chapter VIII. 
EDUCATION. 



i. The programme of collaboration transmitted by me to the Secretary-General 
on December 30th, 1933, contained the following proposal : 

" The Ministry of Education requested the League to send an authority 
on education to discuss the practical application of the proposals made by 
the Education Commission despatched to China two years ago by the International 
Institute of Intellectual Co-operation, and of the Chinese group which paid a return 
visit to Europe in 1932. The Ministry desired the League, in making its selection, 
to choose a person who would be prepared to act as a permanent liaison officer 
in Europe between China and the International Institute of Intellectual 
Co-operation. The duties of this officer would be to prepare technical studies for 
Chinese educational authorities visiting Europe ; to seek out experts at the 
request of the Chinese Government for advising on particular educational 
reforms in China ; and in particular to guide the studies abroad of Chinese 
students. The Council suggested that someone should be selected who had had 
experience in adapting educational policy to a general comprehensive policy of 
industrial reconstruction." 

This request was communicated by the Secretary-General to the International 
Committee on Intellectual Co-operation, and this Committee appointed M. Fernand 
Maurette, assistant director of the International Labour Office, who came to Nanking 
for consultation in March 1934. 

2. M. Maurette held numerous conferences with the officers of the Ministry, 
the Chairman and members of the National Commission on Intellectual Co-operation 
as well as with educational authorities designated by the Ministry. In the light of 
these various consultations, the Ministry of Education presented to the National 
Economic Council a proposal for establishing jointly an Employment Bureau for 
Intellectual and Technical Workers. This proposal was adopted on March 26th, 
1934, and a credit was appropriated permitting an early start to be made. 

The Bureau will be directed by a Committee under the auspices of the Education 
Sub-Committee of the National Economic Council and composed of representatives 
of the Ministries of Education, of Industry, of the Interior, of Railways and of 
Communications, and of the various commissions created to administer the funds 
of the Boxer Indemnity. 

The function of the proposed bureau, which will be established at the Ministry 
of Education, will be chiefly as follows : 

(a) It shall first undertake, in several selected provinces, a general and 
thorough investigation as to their immediate or eventual requirements in 
intellectual workers of different kinds, administrators, officials, various techni- 
cians and members of the liberal professions. This investigation must be general 
— i.e., it must extend to all public or private institutions or organisations likely 



— 60 — 




to supply the Bureau with useful information. It must be thorough — i.e., it must 
have regard, not only to the number of positions to be filled and the general 
and professional category to which they belong, but also to the precise profession 
and the qualifications required of the candidates by reason of the technical 
conditions of the profession and the regional, social and other conditions of the 
places where such professions are to be practised. The investigation will enable 
the Bureau to compile a complete, exact and detailed list of the different 
positions in each province dealt with, to be filled either immediately or at a not- 
too-distant date. This list must be constantly kept up to date by means of 
regular correspondence with the various organisations and institutions who 
have helped to compile it. 

(b) The Bureau shall have as its second task, which is a corollary of the 
first, to endeavour to find first in China itself disengaged intellectual workers 
capable of filling certain of the positions indicated on the list. In short, the Bureau 
must be a sort of Labour Exchange for Chinese intellectual workers living in China. 

Another important function of the Bureau is to guide the education of Chinese 
abroad to enable them to utilise their university and post-graduate studies for 
obtaining practical training adapted to the needs of the reconstruction programme. 
For this purpose, the Bureau will have a branch at Geneva, with which M. Maurette 
will be associated. Arrangements are also being contemplated for extending the work 
of the Bureau to the United States of America. 

3. During his short stay, M. Maurette obtained information as to the mea'sures 
taken by the Ministry of Education for the reform of educational practice since 1932. 
He will accordingly present a report to the International Committee for Intellectual 
Co-operation. This document will, in due course, come before the Council of the 
League. 



k. 



7" 



6i 



Chapter IX. 



RECAPITULATION OF CHAPTERS II TO VIII. 



i. In describing the project of the National Economic Council for 1934, it was 
necessary to discuss the economic conditions which had determined the work under- 
taken. It may therefore be convenient to state the budget in a summary form, and 
also the main details of the programme. 

2. The allocation of funds which was described above is as follows : 

Roads 6,800,000 

Health 500,000 

Cotton 1,000,000 

Silk 750,000 

Kiangsi 1,900,000 

North-west 2,500,000 

Grant to the Geological Survey for studies of fuel . 100,000 

Economic research 200,000 

To this there is to be added : 

For a subsidy to tea experimental stations . . . 64,000 

For general administration and technical experts . 750,000 

For reserve 436,000 

Total 15,000,000 

3. In rather more detail, the programme is as follows : 

Roads. — Loans to the extent of $4,500,000 will be made to the Governments 
of the provinces of Kiangsu, Chekiang, Anhwei, Kiangsi, Hupeh, Hunan and Honan 
for the construction of certain highways needed to provide communications between 
all important centres in these provinces. 

A further sum of $700,000 is to be used for extending highways outside this district 
into neighbouring provinces. 

A sum of $800,000 is to be used for the construction of main roads in Shensi and 
Kansu, and a further half million for the provision of transport along those roads. 

Health. — The sum of $500,000 is to be used to provide for the activities of the 
Central Field Health Station, and for administrative expenses connected therewith. 

Cotton. — The sum of $1,000,000 to be used for cotton is to be spent chiefly on 
improving the yield of the cotton crop, by the encouragement of co-operative societies 
and the foundation of institutions to undertake research in technical methods and to 
conduct propaganda for the dissemination of knowledge of those methods, 



— 62 — 

Silk. — The sum of $750,000 to be spent on silk is to be used for the breeding 
of improved varieties of silkworms, the training of sericiculturists, the subvention 
of instruction in sericiculture, and the subsidising of modern silk factories. 

Kiangsi. — The allocations for the work of rehabilitation in Kiangsi Province 
are as follows : 

For the support and extension of co-operative societies $ 
(including buying and selling co-operatives) and 
the establishment of a central controlling organis- 
ation at the provincial capital 500,000 

For mass education, and the provision of stations for 
the assistance of agriculture ; also for the establish- 
ment of a model provincial hospital, and a public 
health laboratory 560,000 

For the establishment of welfare centres in ten market 

towns 360,000 

For emergency help to refugees and unemployed . . 300,000 

For administration and reserve 190,000 

Total 1,900,000 



North-west. 
as follows : 



The sum of $2,500,000 allotted for the north-west is to be spent 



For irrigation work 

For animal husbandry 

For health and veterinary services 
For agricultural co-operatives . . 
For administration and reserve 



$ 

1,300,000 
400,000 
300,000 
400,000 
100,000 



4. The programmes for silk and cotton have been entrusted to autonomous 
commissions, composed of representatives of organisations interested in these spheres 
of activity and presided over by independent chairmen. The Cotton Control 
Commission has the following statutory powers : 

" To direct and supervise the national cotton-growing and textile industries 
and to enforce measures for their control. " 

The Silk Improvement Committee has power " to direct, supervise and regulate 
silk industry in China ". In the same article of the constitution which confers upon it 
these powers, it is stated that "the Silk Improvement Commission may exercise 
its control over the silk industry in a certain region or within a limited scope with a 
view to extending the control gradually to the whole country". 



5. An advisory Committee has been formed under the Chairmanship of the 
Secretary-General of the Academia Sinica, and composed, in addition, of the Chief 
Secretary of the National Economic Council, the Director-General of the Geological 
Survey, and the Director of the comprehensive investigations at present being 
conducted for the National Government as a whole. The purpose of this Committee 
is to provide the National Economic Council with the technical advice of its constituent 
organisations. Every project will be referred to the Committee, and the Committee 
will also take the initiative in suggesting work which the National Economic Council 
should undertake. 



-:6 3 - 

Another function of the Advisory Committee is to co-ordinate and apportion 
the work of study and research represented by plans of economic reconstruction. 
As we have seen, a number of such problems have arisen in connection with the 
programme of the National Economic Council. The Advisory Committee has allotted 
these studies in the following manner : 

Road Programme, 

Investigations into fuel problems — to the Geological Survey ; 

Investigations of improved roads and of the most suitable type of motor 
engines and vehicles — to the Roads Bureau ; 

The co-operation of the League's Communications and Transit Organisation 
for these studies has been requested, as stated already, and Chinese technical 
officers will come to Geneva this summer (see page 55) for consultation as to the 
precise method of conducting these investigations. 

Water Conservancy. 

The Hydraulics Bureau is collecting documentation which will shortly be 
brought to Geneva, for consultation of the experts selected to visit China in the 
autumn of 1934 (page 42). 

Cotton Commission. 

The Academia Sinica is investigating the scheme for the establishment of a 
Cotton Industrial Study Institute (page 35). 

Land Policy. 

The Advisory Committee will appoint, and will further the work of the 
technical secretariat for the Commission of Three (page 32) ; in particular, the 
methods of aerial land survey will be investigated. The co-operation of the League 
is requested for the work of the technical secretariat. 

General Economic Problems. 

The present position and future prospects of development of light industry, 
the analysis of the effects of tariff policy, and the currency policies as effecting 
economic development are under investigation, both in China and abroad, by a 
group of Chinese economists under the general authority of the Advisory 
Committee. For these studies, co-operation and assistance through the League 
is also invited. 



-6 4 - 



Chapter X. 



RECONSTRUCTIVE ACTIVITY OF THE GOVERNMENT AS OUTLINED 

BY M. WANG CHING WEI. 



i. The work of the National Economic Council, which has been described in the 
last chapter, is only a part of the reconstructive activity of the Government. Other 
parts of its programme are carried out through the agency of the technical ministries 
competent in their respective spheres. 

A consideration of reconstructive activities of the Chinese Government would 
therefore be very misleading if it omitted to mention the part of the reconstruction 
programme with which the National Economic Council is not associated. That part 
has been of considerable extent, and the work already completed, carried out under 
exceptionally difficult circumstances, owing to the depression and the disadvantages 
of a disturbed political situation, has been quite considerable. Effort has been prin- 
cipally concentrated on the development and co-ordination of the telegraph and tele- 
phone systems. But of especial interest, because of the important consequences which 
may follow from it, is the beginning of a policy directed to extending the railway 
system and developing a Chinese inland merchant-fleet. 

2. The relation between railways and roads was discussed in Chapter I. 
Whatever transport policy is finally found to be most advantageous, it is certain that 
China will have greatly to extend its railway system before a large-scale economic 
development can be looked for. At present, it possesses only 7,000 miles of track, 
2,000 of which represents unimportant branch lines, and tracks and rolling-stock 
are both in a deteriorated condition. Since 1911, the construction of new lines has 
almost ceased. 

During the last two years, the Central Government has constructed the following 
lines and sections of lines : 

Canton-Hankow Railway. — This railway, which remained unfinished for 
the last twenty years, will, with the aid of a loan from the British Boxer Indemnity 
Fund, be completed by 1936. The line will be the main connecting line between 
North and South China. 

Lung-Hai Railway. — This railway is being extended to Shensi and Kansu. 
The line will be in operation as far as Sian, the capital of Shensi, by October 
1934- 

Chekiang-Kiangsi-Hunan Railway. — This is a new line, built entirely by 
Chinese engineers. It will connect up the Yangtze provinces. 

So little building has taken place during the last twenty years that the 
resumption is of considerable significance. In view of this, the following paragraphs, 



r 



- 6 5 — 

taken from a statement issued on February 19th by the Prime Minister, M. Wang 
Ching Wei, President of the Executive Yuan, is of peculiar interest : 

" The construction of railways obviously necessitates the expenditure of a 
substantial amount of money. Realising the economic backwardness of the 
country, the late party leader (Dr. Sun Yat-Sen) advocated a policy of inviting 
foreign capital for investment in Chinese railway enterprises. That policy we 
adhere to, fully realising that, in order to attract such investment, we must give 
adequate security, at the same time maintaining the credit of the Railway 
Administration in regard to existing obligations. The Government therefore is 
paying close attention to this matter of credit. Under specific conditions, the 
Government will not only welcome foreign economic co-operation, but will 
exert all the influence within its power to safeguard the interests of its creditors. 
Although the Government is not in a position to repay at once the defaulted 
instalments of the railway loans, it is determined to make satisfactory arrange- 
ments for their adjustment, subject to proper safeguards for the protection of the 
mutual interests of both the railways and the creditors. During the past two 
years, it has devised practicable measures for the amortisation and readjustment 
of some of the domestic and foreign railway loan obligations. These are divided 
into three categories — namely, (1) railway financing, (2) obligations for railway 
supplies and (3) short-term loans. In the first category are included the obligations 
of the Tientsin - Pukow, Nanking - Shanghai, Shanghai - Hangchow - Ningpo, 
Taokow - Chinghua and Kaifeng - Loyang Railways. Measures for repayment 
have been devised, and some have already been carried out. The obligations of 
the Peiping-Liaoning Railway have been fulfilled according to the terms of the 
agreement. During these two years, the obligations for materials supplied in the 
past to the railways have been readjusted, and definite arrangements for 
settlement of obligations amounting to $100 million have been made with the 
British and American creditors. The short-term loans, forming the third class, 
are mostly contracted from Chinese banks ; measures for their amortisation have 
been devised, and some have been already carried out. 

"It is true that not all the railway obligations of the Government have 
been so readjusted and amortised; but, if we continue to follow the policy now being 
pursued, the day will come when we shall have amortised all our obligations. 
Foreign creditors have been criticising the Government for failure to pay off 
its obligations on maturity. While this failure is regretted, we wish to call the 
attention of our creditors to the following two points : In the first place, the failure 
of the Government to liquidate its obligations has sometimes been due to sudden 
and unexpected turns in the political situation. Such things happen, not only 
in China, but also in America and Europe, and we cannot blame any one party 
or circumstance for such failures, since their causes are complicated. For instance, 
with the outbreak of the world war in 1914, various foreign financial groups 
failed to fulfil the terms of their loan agreement entered into with the Chinese 
Government, with the result that construction work on several railways in this 
country was suspended, and, in consequence, heavy financial loss was sustained 
by the Government, since interest on the instalments already advanced had to 
be paid. While our creditors cannot be wholly blamed for this, it is also true that 
the blame cannot be laid entirely at the door of the Chinese Government. Again, 
due to the worldwide economic depression and depreciation of silver, the financial 
obligations of the Government have been largely increased, while, at the same 
time, railway revenues have considerably decreased. Since the economic 
depression and its various reactions are like a natural catastrophe against which 



— 66 — 

no country can offer effective resistance, it is scarcely fair to put the blame 
on China alone. 

" In the second place, it should be understood that the Government has no 
intention whatsoever of evading repayment of its matured loans, and is anxious 
to find ways and means of meeting its obligations ; but the first essential is a 
general revival of railway business. With increased revenues available, the 
interest of creditors will be more fully protected, and it is hoped our foreign 
creditors will co-operate with the Government to this end. The best proof of 
the determination of the Government to pay off its foreign railway obligations 
is afforded by the fact that, during the last two years, it has discharged a number 
of such obligations, thereby showing not only its desire but its ability to carry 
out its pledged word. If our foreign creditors realise these facts, and recognise 
the difficulties with which the Government is faced, their sympathetic co-operation 
will promote the interests of both parties." 

3. The Prime Minister's statement describes also other phases of the work of 
reconstruction carried out during the last two years. His account of the policy intended 
for developing Chinese navigation is also of great interest. It reads as follows : 

" The situation in the shipping business is a source of national humiliation, 
both inland and commercial shipping services being still monopolised by foreign 
interests. The Chinese merely operate two shipyards — the Kiangnan Dock and 
the Mamoi Dock— and the China Merchants' Steam Navigation Company. 
Though the China Merchants' Steam Navigation Company has a history of over 
sixty years, its business has steadily declined owing to mismanagement. There 
are very few shipping companies operated by private interests. Construction 
work requires a substantial sum of money, since every ship represents a value 
of several million dollars. The Government deemed it expedient to take over the 
China Merchants' Steam Navigation Company and convert it into a State- 
operated concern. The shares of the company were bought up by the Government, 
and a receivership committee organised to arrange for the conversion. Since being 
taken over by the State, the company has made considerable progress and 
improvement, as evidenced by the fact that, in the course of the first six months 
of last year (1933), its total receipts amounted in round figures to $3,660,000, 
representing an increase of 30 per cent over the corresponding period of the 
preceding year. Simultaneously, efforts were made to repair old and dilapidated 
ships, warehouses and wharves, as well as to purchase new vessels, including 
four ocean liners for the Shanghai - Hong-Kong - Kwangtung route, and three 
river steamers for the Shanghai - Hankow - Ichang route. These new ships 
will be in service by the autumn of this year. " 

4. A very important achievement of the Government has been the development 
of telephones and telegraphs. Most important towns in China have a telephone system, 
some of which are run as municipal enterprises, some by local merchants. It is, indeed, 
not infrequent to find a private and a municipal service competing with one another 
— in Chekiang, for example, where there are no less than three competing systems. 
The Government plans in time to transfer all telephone systems into a single national 
enterprise, thus eliminating overlaps. For the time being, however, it has limited its 
interests to an improvement of long-distance telephony. In Europe and America, 
local telephones are linked to one another, not directly, but through a regional centre, 
to which all the systems in a region are connected. In China, on the other hand, until 
the Government took the matter in hand, local telephones were not systematically 
inter-connected. The Government plans to establish a co-ordinated system for 



- I 



- 67- 

the provinces of Kiangsu, Chekiang, Anhwei, Honan, Shantung and Hopei. With 
the aid of a loan from the British Boxer Indemnity Fund, it has already completed 
its work in Kiangsu and is preparing the extension of the work into Anhwei. 

China's telegraphic communications with abroad are mainly by cable. It was 
therefore a considerable advantage to China to be able to revise its agreements with 
the big cable companies, obtaining better terms and recovering its cable rights. An 
outstanding feature of the year has been the opening of telegraphic wireless commu- 
nication with the United Kingdom. But, though it is thus in contact with the outside 
world, Central China still does not possess telegraphic communication with its outlying 
provinces, or, except for a wireless station at Sian in Shensi, with the remote north- 
west. The establishment of wireless stations in Charhar, Suiyuan, Kansu and Kokonor, 
Ninghsia, Szechuan and Sikang, and the building of a telegraph line connecting 
Nanking with Szechuan and Tibet, both projected for this year, will therefore have 
general as well as economic importance. 

5. There remains the development of aviation. The Prime Minister gives 
the following account of what has been achieved, and what is planned for the 
immediate future : 

" Let us now review the achievements of the Government in the field of 
civil aviation. Two air mail and passenger services are being operated, under the 
Ministry of Communications, by the China National and the Eurasia Aviation 
Corporations. Whereas, before 1933, the air services of the China National 
Aviation Corporation only consisted of the Shanghai - Hankow and Shanghai - 
Peiping routes, the efforts of the Government to develop the service have resulted 
in an extension to Chengtu, thereby inaugurating a new air route to Szechuan 
province. Moreover, the former Shanghai - Peiping service, which was later 
suspended, has been transformed into a coastal air service. An entirely new 
route — the Shanghai - Canton Airway — has also been inaugurated, and efforts 
are being made to open a new route from Chengtu to Kueiyang (Kueichow) and 
Yunnan, a test flight on this route having already been made. 

" The service operated by the Eurasia Aviation Corporation connects 
Shanghai with Tacheng (Sinkiang), whence it will connect with Berlin, via 
Soviet Russia. It is to be regretted, however, that the Shanghai - Tihua service, 
which had been in operation for a few months, has been suspended owing to the 
unsettled situation in Sinkiang province, the service now only reaching Lanchow, 
the provincial capital of Kansu. Plans are being made for the early resumption 
of the service. 

"Besides the above-mentioned airroutes, the Corporation has also inaugurated 
several branch airways, including the Lanchow - Sining (Ninghsia), the Tihua - 
Hi, and Tihua - Tashkent routes. The Sian - Peiping route is already in operation, 
while measures are being adopted for the inauguration of a Canton - Hankow - 
Sian service, test flights on the Canton - Hankow section having proved successful. 
Commercial service on this section will be inaugurated as soon as the aerodrome 
in Canton is completed." 



— 68 



Chapter XI. 

CONCLUSIONS : METHODS PROPOSED FOR TECHNICAL COLLABORATION 

THROUGH THE LEAGUE. 



i. In the foregoing pages an attempt has been made to present a general picture 
of the activity with which the various technical organisations of the League are 
associated. This necessitated frequent references to reports of the several foreign 
specialists and may perhaps lead to misapprehension as to the contribution which 
the League organisation can render in the work of reconstruction. The effectiveness 
of the services that can be rendered by foreign experts in China is circumscribed by 
the necessity, not only of gaining a knowledge of facts, but also of understanding 
their true significance, their interrelation in a country only a few areas of which are 
usually visited by them, and with the people with whom they can seldom establish 
direct relationship in view of their unfamiliarity with the language. The extreme 
affability and hospitality shown to the foreign expert often prevent him from realising 
the great effort required of his Chinese colleague in affording him all requisite infor- 
mation, in continually translating relevant documentation for him into a language 
he can understand, and the responsibility felt in the selection of the data to be made 
available for the common study. Even were the conditions not as complex as they 
are in China, in view of the co-existence in practically every sphere of public endeavour 
of customs and traditions appropriate to various stages of evolution of modern 
society, the task of the foreign expert would still be difficult if he has only his own 
national experience in his particular sphere of work to rely upon. He needs detailed 
knowledge of — or, better, actual experience in — the practice of other countries than 
his own, particularly such as have before them acute problems of the magnitude of 
those confronting the Chinese administrator and technician. 

2. There are many cases in which the Chinese Government engages under 
contract foreign specialists for consultation of a temporary character, or for enlistment 
in various branches of national administration and its technical departments. The 
number of foreigners so employed at present is considerable, and may even increase 
as the process of industrialisation develops and calls for enlargement of the technical 
cadres. It is not suggested that the present arrangement should be modified, by which 
the Chinese Government may obtain advice and nominations through the office of the 
Technical Agent. It is, however, open to question whether it would be advisable to 
establish a general practice of recruiting foreign specialists through the instrumen- 
tality of the League. Such a practice would result in adding a new category of foreign 
expert to those already existing, particularly because the Government departments, 
national institutions and provincial authorities would continue to engage suitable 
persons either directly or through the intermediary of numerous public and private 
agencies with which they have habitual contacts. A tendency might develop to 
consider officers engaged through the League as either enjoying particular terms of 
tenure or having a claim to an undefined connection with the League. This might 
involve the League in responsibilities which the League Council would probably 
not desire to accept. 



- 69 - 



3. Experts coming to China under the responsibility of the League have a 
special r61e to fulfil. The League will, in future, continue to receive requests for their 
despatch, and proposals are being made for a further extension of the plan of colla- 
boration proposed for 1934. In particular, it may be recalled that, when the National 
Economic Council was set up in 1931, the Chinese Government arranged with the 
Secretary-General for " a constant contact to be maintained between the Economic 
and Financial Sections of the League and the permanent organisations of the National 
Economic Council ; and arrangements for the interchange of full statistical and other 
information ". In the present new stage of technical collaboration, the need for the 
maintenance of such a contact and its proper organisation is desired at an early date. 

I would present to the Secretary-General proposals to permit an ampler utili- 
sation of the credits in the League budget for technical liaison in China (and particu- 
larly so as to include the office of the Technical Agent l of the Council). 

The Technical Advisory Committee of the National Economic Council for 
economic studies and planning, composed, as stated previously, of the Secretary- 
General of the Academia Sinica, the Directors of the Geological Survey and of 
Governmental Research, and of the Chief Secretary of the National Economic Council, 
would find it convenient to obtain regularly from the League Nanking Office such 
information for its constituent institutions as was contemplated in the arrangement 
of 1931. The presence in the Nanking Office for certain periods of experienced senior 
members of one of the two Sections is particularly desirable when the National 
Economic Council has selected for study and planning a number of problems with a 
view to concrete action. 

As regards experts commissioned by the technical organisations of the League, 
their missions should be conceived essentially as consultations in relation to clearly 
defined problems or groups of problems. The consultation should be preceded by- 
requisite technical surveys and studies in China, which can best be effected by the 
Chinese technical and administrative authorities, institutions and individual specialists. 
Whenever possible, the necessary documentation should be brought to Geneva by 
competent Chinese technical officers before the departure of the person or persons 
selected for the consultation. With the adoption of such a procedure, some progress 
could be made on the voyage, and the duration of the mission accordingly shortened. 
The consultation should, as a rule, relate to a contemplated action ; the choice of the 
consultant is of primary importance, and it should be limited to prominent specialists 
of international authority. 

It will be found that, during the stage of specific application of plans or policies 
whenever representation of a League technical service may be desired for longer 
periods of time, such a representation should, as a rule, be entrusted to someone 
having intimate knowledge of the working methods of the international organisation 
represented and a personal experience not limited exclusively to his own country. 
The practical examination of new aspects, new problems and new situations attendant 
on the development of any action would be demanded of him, and his primary 
preoccupation should be how to ensure the requisite technical contact with the outside 
world for the success of the work with which he is associated. Enjoying special 
facilities for travel in China, his presence would be utilised by his Chinese colleagues 
for speeding up the realisation of the common plans. 

4. One of the most hopeful prospects for the success of reconstruction in China 
lies in the manifold activities of a large number of its citizens specialised in many 
fields of technical work who carry on their work steadily, away from the limelight of 



1 After consultation with the Secretary-General, this office was designated, in November 
1933, as the Information Office in Nanking of the Technical Organisations of the League of 
Nations. 



— 7 o — 

publicity, in a spirit of public service and guided by the interest of accomplishment. 
These men, having known the disillusionment s attendant on changes of political 
programmes and political regimes and having passed through bitter experience of 
calamity and war at home and of the ineffectiveness of measures of international 
collaboration on major issues, have now attached themselves resolutely to positive 
development work and some of them to the task of planning how best to build up 
their own country in all the present circumstances. Their background of solid technical 
knowledge was acquired partly in China, partly abroad. Having given a good deal 
of thought to the study of the working of the economic machinery of leading countries 
in the world, many of them have gained a remarkable — and perhaps generally 
unsuspected — insight into Western practice in fields of public endeavour — financial, 
economic, industrial, and agricultural — and often also into the philosophy underlying 
public policy in foreign lands. In short, China can count to-day on men with the 
requisite expert knowledge and clear understanding of their own technical needs and 
of the type of reform or improvement required. Except in some specialised domains, 
these men and their younger associates are capable of meeting the exigencies of a 
situation under favourable general conditions. But only a few have as yet shared 
the burden and responsibility of office, and, while their knowledge of the problems 
facing the leading countries and the manner in which they are met is generally 
accurate and at times illuminated, they have not, save in exceptional cases, had 
opportunities abroad for definite association in the practice of public life or of industrial 
enterprise, or of the application of economic policies. 

5. The constitution and structure of the League's technical organisation permit 
of considerable elasticity, and it can therefore find adequate utilisation in further 
supplementing the modalities of collaboration. There is no doubt that greater 
emphasis should be laid on visits of Chinese specialists abroad than has hitherto been 
the case. At present, contacts abroad are limited mainly to diplomatists and such 
eminent intellectuals as are fully conversant with foreign languages. Technical 
contacts between men holding responsible positions in economic and public life should 
be multiplied and placed on an organised basis. There is available in the Secretariat 
of the League and at the International Labour Office a wealth of unique material 
and a very special technical experience accumulated during fourteen years of intense 
economic, social, and political re-adaptation of the world to new conditions during 
this period of transition from the pre-war economic and political order to that still 
in process of active evolution. China participates in this process perhaps more 
intensely than many other countries. The revolutions of 1911, 1925 and 1927 have 
marked various stages of this profound transformation, which started as a movement 
of emancipation from an obsolete internal political regime, from obsolete external 
conventional relationships, from obsolete customs of economic activity, social life 
and system of education. The present stage is marked by a search for a new structure 
for economic and financial development, for social transformation and a new political 
orientation. Certain phases of this process have been described in the preceding 
pages. The technical collaboration through the League should provide facilities 
for a close working association with men in institutions having technical responsibility 
in the various countries for framing and executing policies in the spheres of economic 
activity and economic and social reform. The following may be some of the concrete 
forms of this association : 



(1) Systematic and planned utilisation of the archives of the Secretariat 
of the League and the International Labour Office under the guidance and with 
the experience of the members of the staff of the two institutions. 



— 7i — 

(2) Similar facilities might be arranged with the Secretariat of the Bank 
for International Settlements, of various national economic and planning 
councils, and kindred leading institutions in Europe and the United States. 

(3) Technical commissions and sub-committees of the League and of the 
International Labour Office should invite the active participation, not only in 
their sessions, but particularly in their concrete studies, of Chinese specialists 
from among the group of men whose competence and interests have just been 
described. 

(4) Experimental and other investigation of certain technical problems 
affecting Chinese reconstruction may be entrusted to leading institutions of 
economic and industrial study abroad, with the understanding that Chinese 
specialists should participate in the pursuit of these studies ; the precise method 
would clearly depend on the nature of the question to be investigated. 

(5) The practice established by the Health Organisation of giving facilities 
to senior technical officers of the Government for acquiring special experience 
with foreign services of a kindred character, if extended to other fields, would 
prove of distinct advantage. 

(6) Arrangements recently proposed by the Ministry of Education to the 
International Institute of Intellectual Co-operation for the guidance of the studies 
of young Chinese students abroad, if properly developed, may prove of great 
importance. 

I would beg leave to examine with the technical organisations and with the 
Labour Office the appropriate methods which may be recommended in relation to 
the various categories of problems and of individual experience. After a detailed 
examination of these possibilities, the technical advisory committees of the League 
and the Labour Office would be in a position to present concrete proposals. 



* 
* * 



6. The final decision of the Central Authorities to appropriate $15,000,000 for 
the activities of the National Economic Council in 1934 — three times the amount 
spent during the preceding two years— ought to give assistance and encouragement 
to provincial authorities in areas which the Government has deemed proper to select, 
and to afford guidance for economic activity in the few selected fields. Thus, a firm 
foundation has been built on which a national machinery of economic development 
can now be based. It was the desire to create such machinery which prompted the 
Government three years ago to establish the National Economic Council. The 
institution has had to develop under the grave conditions prevailing in China and 
abroad during the last three years, and it is not surprising that the form of its structure 
has had to be evolved in contact with the realities of the situation, which necessitated 
considerable elasticity in determining its constitutional position and administrative 
competence. Membership of its Standing Committee is accorded to holders of the 
most important offices in the State, who thus take under their auspices systematic 
study and planning, as well as the responsibility for providing credits for field activity. 
It is the Standing Committee which also determines proposals for technical collabo- 
ration with and through the League, which collaboration need not necessarily be 
limited to activities financed or directly undertaken by the Economic Council. It 
may and does include co-operation with any technical Ministry or commission, the 
requisite arrangements being made through the Standing Committee. 




I 



7. This collaboration should continue to be based on the arrangements concluded 
in 1931 and continued in 1933 ; it will be carried out with the elasticity permitted by 
the constitution of the League technical organisation and required by the changing 
economic and political order of the present day. It will aim at associating the national 
technical services of China with those engaged in a similar endeavour in other countries, 
and, by so doing, to contribute at the same time to strengthening the foundation 
and the function of national machinery for the economic development of China. 

8. A survey of the economic and financial situation of China to-day was recently 
completed at the request of the National Economic Council by Sir Arthur Salter, 
who lately spent three months in China at the invitation of that Council to study 
economic and financial subjects. The report discusses in turn : 

China during the world depression ; 

The Chinese dollar and other currencies ; 

The drain of silver into Shanghai ; 

The balance of foreign payments ; 

The balance of trade ; 

The fall of prices ; 

Currency and currency policy as related to external and internal conditions ; 

The re-entry of foreign capital into China ; 

The budget of the Central Government and of the provinces ; 

The public indebtedness ; 

Agricultural production ; 

Industrialisation ; 

Railways ; 

Roads. 

It provides abundant material on which to build up an active policy of economic 
development. 



L. Rajchman. 



Nanking, April 1934. 



Aiiorlsed Agents lor the fornications ot the League ol nations 



ARGENTINE 

Libre 
AUSTHA1 



calle Florida 371 
tnomwnlth of) 



IRISH FREE STATi: 

£2, Middle Abbey Street, Dublin. 
I ; >»llerla Vittorlo 



BRAZIL 



OtBce, Marunouchi-C-13. Tokio . 
zen-Kabusblkl-Kaldu), 6, Nlhoa- 

honbashl. f 



€UI 



Tencla Misrachi), 



'iKU 



.IliiWAJ 



PANAMA. 

igbonet, Caiillla de 
Zgoda 12, Warsaw. 



FINLAND 



CKOWX VOl 



, jiYIII 



«.(-:; 



. ITEHA 



<t de? 
nvsuAarr 

Llbratrie Gi 
ICELAND 

Peter Hall 

INDIA 






ilriln 



Til AFRICA (luloii 



UX, NEUCM 
Crtrsberger A Rau 



STOCKHOLM. 

a, LAUSANNE, VBVBT, 
.'JRICH. 



le de Turqule, 469, avenue de 

NT4TEN OF A5IERICA 

datlon, 40, Mt. Vernon Street. BOSTON », 



ss.Apartado 

rue Knsz 
l'Academte YougOilftve, St. 

a ultca, LJUBLJANA. 






tOntr countries, apply : 

Publications Department of the League of UTation», 
Geneva (Switzerland).